Published On : Mon, Apr 25th, 2016

Govt approves 8.7 per cent interest on provident fund deposits

New Delhi/Nagpur: The Finance Ministry has approved 8.7 per cent interest on Employees Provident Fund deposits for 2015-16, Labour Minister Bandaru Dattatreya announced today. The interest rate till last year was kept at 8.75 per cent.

In February, the Labour Ministry had issued a notification restricting 100 per cent withdrawal of provident fund by members unemployed for more than two months. The earlier decision was then deferred till April 30 but as protests persisted, the government decided to postpone it yet again.

The EPFO had also restricted withdrawal of PF to the employee’s own contribution and interest earned on that, if the claimant has remained unemployed for more than two months.

According to the new norms proposed earlier this year, subscribers are not to be allowed to claim withdrawal of PF after attaining 54 years of age, and would have to wait till 57. The earlier norms allowed contributors or subscribers to claim 90 per cent of their accumulations in their PF account at the age of 54 years, and the final claims to be settled just one year before their retirement.

Workers of a garment factory took to the streets and blocked traffic on the busy Mysuru-Bengaluru highway and set many vehicles ablaze last week to protest amendments to the provident fund rules.
Some 20 people were arrested and police fired warning shots as stone pelting protestors attacked the cops.

Trade union leaders said that they are of the view that the curbs on withdrawal are unnecessary as the quantum involved is just 3.67 per cent of the employer’s contribution.

“It is an unwanted and unnecessary decision. All the trade union representatives in the board of trustees had opposed the move. Even a couple of employer’s representatives were in agreement with our views,” Centre of Indian Trade Union (CITU) president and CBT member AK Padmanabhan had said.

According to him, it is a confusion created by the bureaucracy and there is no rationale for restricting the withdrawal.