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AITUC wants rethink on EPF interest rate

By Our Staff Correspondent

NEW DELHI, AUG. 8. The All-India Trade Union Congress (AITUC) has asked the Centre to reconsider its decision to lower the interest rate on the Employees' Provident Fund (EPF).

The EPF Board of Trustees, chaired by the Union Labour Minister, Shish Ram Ola, is expected to announce the EPF interest rate for the current financial year tomorrow. Going by the low interest rates on small savings, the EPF rate is likely to be lowered from 9.5 per cent to 8.5 per cent. The decision will be announced after three rounds of meetings during which no consensus could be reached due to stiff opposition by the Left-supported trade unions on lowering of interest rate.

In the third meeting, Mr. Ola had held individual discussions with the employees, employers, trade unions and the State representatives. Indications are that the decision will be based on a majority vote instead of a consensus, as has been the tradition.

"We will never agree to reduction in the interest rate," the AITUC general secretary, Gurudas Das Gupta, told The Hindu here today. When the Government could give up an earning of Rs. 6,000 crores by way of turnover tax on stockbrokers due to pressure, why was it hostile to the demands of the trade unions to increase the interest rate, he asked.

Describing the reduction as more politics than economics, Mr. Das Gupta said EPF was the only social security scheme since there was no provision for old age pension. "As it is, the inflation is going up with the Wholesale Price Index (WPI) touching eight per cent and lowering of the interest rate on small savings — as announced in the Budget provisions — means erosion of real value for the subscribers' money," he pointed out. The three-crore subscribers would lose real value for their money if the interest rate was brought down.

He also demanded a scrutiny of the accounting system of the EPF as he alleged that there was diversion of funds from the scheme to project it as a lower capacity scheme.

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