The government has agreed to restore the employee provident fund interest rate to 9.5 per cent from the present interim 8.5 per cent for this fiscal before the next Budget, Communist Party of India MP Gurudas Dasgupta claimed on Thursday.

"As I understood him (Prime Minister Manmohan Singh), he agreed to increase the interest rate from 8.5 per cent to 9.5 per cent," Gupta told NDTV.

He said indications to this effect were available from the prime minister when he led a delegation of leaders of All India Trade Union Congress to apprise him of workers and peasants' problems.

Asked about the objection of finance ministry that such a high EPF interest rate was not sustainable, he said it was not his problem. "Government has made up its mind to increase the EPF rate from 8.5 per cent to 9.5 per cent," he added.

As per the calculations of Central Board of Trustees of Employees Provident Fund Organisation, offering 9.5 per cent would lead to an unfunded gap of Rs 927.15 crore (Rs 9.27 billion) between what it gives to over four crore beneficiaries and what it earns on investments.

"I am definitely of the view that interest rate is going to be increased from 8.5 per cent to 9.5 per cent before the next Budget," Gupta said.

PMO spokesman, however, said the prime minister merely assured them that the rate would be increased but did not indicate any quantum.