EPF rates reduced to 8.25 percent for the year 2011-12

The UPA government has cut the interest rate of Employees’ Provident Fund (EPF) from 9.5% for 2010-11 to 8.25% for 2011-12 just two days before presenting the general budget.

This is the largest single reduction in the interest rate in of the EPF in last decade that was announced on 14th of March 2012. However, the members of the trade union of Employees’ Provident Fund Organisation (EPFO) have strongly opposed the reduction in the interest rates considering the factors of inflation and other reasons.

CPI leader Gurudas Dasgupta has said that the issue will be raised in the parliament on Friday after a detailed discussion with opposition parties.

Moreover, the EPFO found a surplus amount of Rs 1,731in its account during the last fiscal year when the interest rate was 9.5% for the subscribers. Considering the same, the interest rate has been reduced to 8.6% for the EPFO subscribers for the current fiscal year after the recommendation from labour ministry.

Last year on December 2011, three EPF rates of 8.25%, 8.5% and 9.5% were recommended by the EPFO board of trustees headed by labour minister Mallikarjun Kharge and the final decision was left to the finance minister Pranab Mukherjee.