The Employees Provident Fund (EPF) Board today agreed to continue paying 8.5 per cent interest rate to its nearly 4 crore subscribers for fiscal 2006-07 as well. “Amid protests by some trade union representatives, it has been decided to pay 8.5 per cent interest rate on provident fund,” labour minister Oscar Fernandes said after a three-hour meeting of the EPF Central Board of Trustees.

Fernandes said that the EPF had constituted a sub-committee to assess the Board’s finances. The report of the committee, placed before the meeting for deliberation, found that there would be a surplus of Rs 595 crore with the board.

The decision to retain 8.5 per cent interest will put a burden of Rs 450 crore on the EPF fund but sources said that the deficit could be offset from a surplus of Rs 590 crore lying in the Interest Suspense Account, Contingency Reserve and Special Reserve Fund. The Board will submit its recommendations to the finance ministry, which is expected to notify the rate shortly.

Even after paying 8.5 per cent interest rate, the fund would be having a surplus of Rs 83 crore. The EPF has a corpus of Rs 94,000 crore including pension fund.

The total interest outgo for financial year 2006-07 will be approximately Rs 7,800 crore, Fernandes said, adding that the decision pertaining to interest payment for the current fiscal will be decided later. Referring to the demand of trade unions to pay higher interest rate, he said the board had fixed the interest rate only for the previous year.

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