Kharge hopes EPF interest rate will be hiked to 9.5 percent

February 16th, 2011 - 12:40 am ICT by IANS  

New Delhi, Feb 15 (IANS) Labour and Employment Minister Mallikarjun Kharge Tuesday expressed confidence that the finance ministry will agree to the proposal to hike interest rate on employees provident fund to 9.5 percent from the existing 8.5 percent. Speaking to reporters after the meeting of the Central Board of Trustees of the Employees’ Provident Fund Organisation (EPFO) here, Kharge said that his ministry has answered all clarifications sought by the finance ministry.

“As far as 9.5 per cent interest (2010-11) is concerned, the finance ministry had sought some clarifications. Those clarifications have been sent by Labour Secretary P.C. Chaturvedi,” he added.

“I hope that after we answered all clarifications, they (finance ministry) will approve it (9.5 per cent interest rate for 2010-11),” he said.

The board also deliberated on the investment pattern to be followed by EPFO in view of the letter from the finance ministry.

“After deliberations and detailed discussions, the CBT decided to act with proper prudence and responsibility to ensure that the capital invested by the members was safe. The members reiterated that safety of capital was more important than return on capital and, therefore, decided to continue with the present pattern of investment,” a labour ministry spokesman said.

The meeting also adopted the audited annual accounts for 2009-2010.

The spokesman said that a decision was also taken to resume investment in LIC Housing Finance (LICHF), a subsidiary of the Life Insurance Corporation, after the board reviewed its decision taken in the last meeting to not make further investments in the firm.

“The board decided that the investments may be continued in LIC HF Ltd in view of the fact that LIC is a large public sector unit, and it has been confirmed by the finance ministry and the credit rating agencies, that its finances are sound,” he said.

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