New Delhi, November 21
Marathon six-hour-long meeting of the Employees Provident Fund Board tonight failed to clinch the contentious issue of interest rate to be paid to over 4 crore subscribers for the current fiscal and has decided to meet again on December 7 to discuss the issue.

Against a recommendation of an EPFO sub-committee for 8 per cent interest, both right and left wing trade unions demand at least 9.5 per cent rate for 2005-06.

Visibly tired after a long discussion, Union Labour Minister K Chandrashekhar Rao told reporters that the Central Board of Trustees of EPF would meet on December 7 to arrive at a decision on the interest rate and other contentious issue.

He said an expert committee would be formed to look into the contentious issue of investing 5 per cent of the fund in the capital market as suggested by the Finance Ministry. However, labour unions were opposed to the proposal.

Rao said he would urge upon Prime Minister Manmohan Singh to take up with the Finance Minister the issue of raising the interest rate of Special Depository Fund (SDF), where about 65 per cent of EPF fund are invested.

The EPFO’s total corpus of about Rs 1,28,000 crore includes Rs 71,000 crore of the EPF, Rs 52,000 crore of the Employees Pension Scheme and Rs 4,000 crore Employees Deposit-linked insurance.

The 9.5 per cent interest fund, subscribers got in the last fiscal, resulted in a gap of Rs 716 crore. The deficit was met through the reserve fund, which now is left with a corpus of Rs 250 crore, sources said.

With low fund in the corpus, the EPF could think of paying only about 8 to 8.25 per cent interest for 2005-06, the sources said.

In rare sence of workers’ unity, labour unions affiliated to Left, Right and Centre political parties, demanded the 9.5 per cent EPF rate.

In a joint written submission to the Labour Minister, they said ‘’The government persists with the administered rate of interest at 8 per cent and has resorted to issue of government bonds (in which a minimum of 40 per cent of EPF funds are required to be invested as per the guidelines on investment) at interest rates further below that rate resulting in the yield on the investments of the EPF dropping further.’’

Leaders of the BMS, the INTUC, the CITU, the AITUC, the HMS, and the UTUC-LS submitted a written submission to this effect when they participated at the meeting of the board of trustees of the EPF Organisation Meeting, which took place at the EPFO headquarters here.

They said the deposits in the EPF constituted the mandatory savings from out of the earnings of the workers of which substential portion remained invested with the government for almost the entire career of the workers.