The EPFO’s Central Board of Trustees had earlier this month recommended 8.1 per cent interest on EPF deposits for the financial year 2021-22. This is the lowest level since 1977-78
Nirmala Sitharaman on EPFO: Finance Minister Nirmala Sitharaman has defended the proposal for reduction of interest on provident fund deposits to employees.
The Finance Minister said in the Rajya Sabha that this rate reflects today’s realities where the interest rates on other small saving schemes are even lower. Deposits on PF have recently been reduced to 8.1 per cent, the lowest level in more than four decades.
A Central Board of EPFO recommends
Sitharaman said that the EPFO has a central board which takes a decision on the interest rate and they had not changed it for some time. They have now changed it to 8.1 per cent.
Earlier this month, the Central Board of Trustees had recommended 8.1 per cent interest on EPF deposits for the financial year 2021-22. This is the lowest level since 1977-78. Earlier the interest rate on EPF was 8.5 percent.
Interest is higher than other small savings schemes
Significantly, the ministry led by Sitharaman is the nodal authority to approve the recommendation of the Central Board of EPFO.
Comparing the interest rates with other schemes, he said that the interest rates on Sukanya Samriddhi Yojana (7.6 percent), Senior Citizens Savings Scheme (7.4 percent) and PPF (7.1 percent) are getting lower. At the same time, the interest rate on SBI’s fixed deposits for 5-10 years is 5.50 percent.
He said, “The Central Board of EPFO has taken this decision keeping in mind the realities of today. This proposal is yet to come to the Finance Ministry for approval, but it should be noted that these rates are still higher than other schemes.
Government increased food subsidy
On food subsidy, Sitharaman said that in the budget for 2021-21, a provision of Rs 2.43 lakh crore was made for food subsidy. The revised estimate was Rs 2.87 lakh crore. “When there was a need for more food subsidy than the budget estimate, we provided it immediately without any hesitation,” he said.
