The central Board of Employees provident Fund Organisation(EPFO) has advised for a hike in the interest rate of Employees provident fund(EPF) to 8.65% for fiscal 2018-19, a notch higher then previous 8.55%. The increase in hike will give benefits to the currently enrolled 6 million EPF subscriber.
The recommendation is yet to get an approval by the finance ministry, once approved the increase in interest rate will be implemented. The decision to hike interest rate just before general election 2019 is seen as move to appease 6 Crore employees.
EPFO will have surplus of around ₹150 Crore after the implementation of this new recommendation.The CBT (Central Board of Trustees) which is apex decision making body for EPFO, is a tripartite body which have representatives from the government, employers and trade unions headed and is headed by the labour minister.
For the year 2017-18 EPFO kept the rate of interest at 8.55% which is lowest in the last five year. The body kept the rate at 8.8% for 2015-16. The recommendation if accepted by the ministry would lead to first time hike in interest rate since 2016.