EPFO’S interest rate is cut to 8.1% from 8.5% for 60 million salaried subscribers; lowest since 1977-78
EPFO’s 60 million salaried members will be disappointed with this announcement. On Saturday, the interest rate on employee provident funds was reduced from 8.5 percent to 8.1 percent for the fiscal year 2021-22. According to labour ministry data, this is the lowest number since 1977-78, when it was 8%.
Employees provident fund organizations have roughly over five crore subscribers (EPFO).
The decision was reached at a meeting of the EPFO’s central board of trustees held in Guwahati. While elaborating on the board’s decision, Labour Minister Bhupender Yadav stated that the interest rate was set after taking into account current international conditions and market factors.
“After evaluating the current market environment as well as the worldwide landscape, we recommended an interest rate of 8.1 percent. We also can’t invest in high-risk products since we have to consider social security and market stability, thus the decision was made “Mr. Yadav stated following the board meeting.
The board’s suggestion will be forwarded to the finance minister as soon as possible. In 2020-21, the interest rate was 8.5 percent. EPFO would direct its field offices to credit the interest revenue computed at the increased rate of 8.1 percent for 2021-22 in the subscribers’ accounts after the finance minister approves the board’s decision.
However, it is remarkable that when the economy is improving after the Covid-19 pandemic even though government itself has claimed, the EPFO interest rate is falling. The EPFO was slashed after a long period of time, dating back to 1977-78.
