In a measure of relief to the Indian salaried class, the government on Thursday announced that it would contribute 12 per cent of the wages to new employees under the Employees Provident Fund Organisation (EPFO).
The announcement was made by Finance Minister Arun Jaitley while presenting the Budget 2018-19, which is the last one being tabled by the current government in Parliament before the general elections due in the first half of 2019.
"Government has decided to contribute 12 per cent of wages to new employees across all sectors in EPF," Jaitley said.
With the existing contribution of 1.16 per cent towards EPFO subscribers' basic wages, the government bears an annual burden of around Rs 6,750 crore.
The current 8.65 interest rate on EPF deposits was lowered during the last fiscal, from the previous 8.8 per cent prevailing in 2015-16.