Do you have a Provident Fund? Well there's a good news for you.
In spite of Finance Ministry's insisitence to lower interest rate, the Employee Provident Fund Organisation (EPFO) and Labour Ministry are understood to make a case to keep the interest rates at 8.65%.
The EPFO had raised interest rates by 10 basis points on February 21 this year. Interest rate for financial year 2018-19 was fixed at 8.65%. This was 10 basis points upwards from 8.55% fixed for financial year 2017-18. EPFO and the Labour Ministry think that the rate should be maintained.
Sources within the EPFO said that its not logical to reduce interest rate as the government does not provide subsidy on the interest rates.
However, increased interest payout is sure to reduce surplus with the EPFO. It's calculations have showed that reduced interest rate will leave a surplus of Rs 500 crore with EPFO.
On the other hand, if interest rate is maintained at 5.65%, the surplus will only be above Rs 100 crore.
However, higher interest rate on Provident Fund is sure to benefit working class.