By IANS
New Delhi : The Employees Provident Fund (EPF) board Sunday night kept in abeyance the decision on the interest rate for 2006-07 and 2007-08 as the Leftist trade unions blocked any move to cut the payout to about 40 million subscribers.
The special meeting of the EPF Central Board of Trustees (CBT) deferred the decision in view of the Election Commission's model code of conduct, which is in place ahead of the June 9 Goa assembly polls, trade union sources said.
The next meeting of the board is now slated for July 2, they said.
The Left-backed trade unions have stuck to the demand that the interest rate should not be reduced from the current 8.5 percent.
Chairing the meeting, Labour Minister Oscar Fernandes, who is also chairman of the CBT, said the most "telling effect" of non-declaration of the interest rate will be felt in updating annual accounts and furnishing information of balances to members.
He said the delay would also lead to accumulation of Interest Suspense Account, which draws "adverse attention".
Fernandes said it would have implications in further rollout of the Re-inventing EPF India Project.
The minister appealed to the CBT members to recommend the interest rate not only for the previous years but also for the current fiscal.
The finance and investment committee of the board in its 83rd meeting held in March 2006 had observed that only an interest rate of 8 percent was sustainable out of the income of the fund during 2006-07.
This conclusion was, however, rejected by the trade unions.
The trade unions have been suggesting that since some banks were currently offering up to 10.5 percent interest on fixed deposits, the EPF rates should, in fact, be hiked accordingly.
The CBT during its meetings this year has expressed its inability to pay 8.5 percent interest saying the move would lead to a deficit of Rs.4.50 billion.