Labor Minister Bandaru Dattatreya announced today that EPFO (Employees’ Provident Fund Organization) subscribers will be getting 8.65% interest on provident fund deposits for financial year 2016-17. The announcement comes amid speculation that the Finance Ministry may want to lower the EPF interest rate by up to 50 basis points. The decision to give out 8.65% interest has been taken by the Central Board of Trustees (CBT), which is the apex decision making body for EPFO. The standard practice is that such decisions need to be ratified by the Finance Ministry.
Dattatreya said that the labor ministry discusses such matters with the finance ministry, so there should not be any problem. He said that the EPFO would have a surplus of Rs 158 crore after giving interest at 8.65%. Since, the interest will be provided by EPFO’s own funds, there is less chance of an objection from the finance ministry, said Dattatreya. The minister also said that the outlook for 2017-2018 is encouraging, wherein EPFO can earn better returns.