While rising prices of petrol, diesel and LPG cylinders are already troubling the salaried class, they are likely to suffer another major blow as the interest rate on the Employees’ Provident Fund (EPF) could be slashed for the financial year 2020-21. Over 6 crore people will be affected from the move.
The will be a huge setback to the PF subscribers who were already worried about not getting the interest till last year.
According to a Zee News report citing sources, people have done a large number of EPF withdrawals during the coronavirus pandemic, during which the PF Contribution has also decreased. It is for this reason that the Employees’ Provident Fund Organization (EPFO) might go ahead with the cut in interest rates. The EPFO Central Board of Trustees (CBT) will meet on March 4 to decide on the new rates.
It may be recalled that the government had announced to pay 8.5 percent interest for the financial year 2019-20. The Central Board of Trustees had earlier said that 8.5 percent interest will be paid in two installments in the financial year ending March 31. That is, 8.15 percent investment and 0.35 percent interest will be paid from equity.
Interest on EPF was 8.5% in FY 2020, which is the lowest interest in 7 years. Prior to this in FY 2013, the interest rates on EPF were 8.5%. In March last year, the EPFO revived the interest. Earlier, in FY 2019, EPF used to get 8.65% interest. EPFO paid 8.55% interest in FY 2018, which was 8.8% in its first fiscal year 2016. Earlier, in FY 2014, it was 8.75%.