By SAT News Desk
NEW DELHI, 15 March 2022: The decision of the Indian government to cut the interest rate of the ‘Employees Provident Fund'(EPF) deposits has received flak from unions and political parties. EPF is the main scheme under the Employees’ Provident Funds and Miscellaneous Act, 1952 where the employee and employer each contribute 12 percent of the employee’s basic salary and dearness allowance towards EPF. The deposit earned 8.50 % interest p.a., which now has been cut to 8.1 % interest.
The All-India Trade Union Congress (AITUC), CPI’s trade union wing, in a statement has said that all employee representatives in the Central Board of Trustees (EPFO), demanding continuation of 8.5 % as the rate of interest on accumulations in employees’ accounts for the year ending 31 March 2022. The chairman has recommended 8.1 %, but the final call will be taken by the finance ministry, Government of India.
The AITUC has opposed any reduction in interest rates on the following grounds:
1. The Government is abdicating its responsibility to provide social security to the industrial workers and leaving them to the vagaries of financial markets;
2. To reduce the interest rate amounts to reducing the protection offered by PF accumulations in old age, a problem faced by all senior citizens who hope to support themselves by interest on their savings;
3. It is high time the Government contributes to social security funds to take care of all sections of toiling people from Kisans to Organized and Unorganised Sector workers. No amount of playing around with financial markets will help the crores of toiling people, who are rightfully demanding their share in the National Wealth, which they alone produce.
4. The AITUC has rejected the so-called actuarial calculations put forth by the Minister of Labour, GoI to justify the proposed reduction in the interest rate. The Minister has agreed to form a committee, with representatives of employees, to look into the actuarial calculations, but in the meantime, the recommendation for an interest rate of 8.1% will be forwarded to the Finance Ministry.
5. The AITUC calls upon the toiling people of India to raise their voice against this forcible reduction of interest rates for senior citizens when they go into the action of all-India strike on 28-29 March 2022.
The issue was raised during the zero hours in the Indian Parliament by DMK member T R Baalu who slammed the government for lowering the EPF deposit interest rate. Baalu demanded that the Centre restore the interest rate on EPF deposits to 8.5 % and fix the minimum pension under the employee pension scheme at Rs 3,000 per month, reports PTI.
Baalu, who represents Sriperumbudur in Lok Sabha, said the Seventh Pay Commission had recommended Rs 18,000 as minimum wage and Rs 9,000 as monthly pension. However, he said that the Centre only pays Rs 1,000 as a monthly pension under EPS.
PTI adds: Trinamool member Saugata Ray also objected to the lowering of interest rate on EPF deposits and voiced concern about the privatisation policy of the government.
“The government should not take the victories in the assembly elections to ride roughshod on the workers. Already it has shown its teeth by reducing the interest rate on EPF deposits,” Ray said.
He said the government has sold Air India and Neelanchal Ispat Nigam Limited and has lined up privatisation of Life Insurance Corporation, two public sector banks and listed out 36 public sector undertakings for strategic disinvestment.
Ray said the government was also planning to sell airports and ports to private companies and to invite private companies in railways.
