On Tuesday, Labor Minister Santosh Gangwar announced that over 6 crore subscribers of the Employees' Provident Fund Organization (EPFO) would receive 8.65% interest on deposits for the financial year 2018-19.
Currently, EPFO is settling PF withdrawal claims at 8.55% interest, approved for the 2017-18 financial year.
Gangwar made the announcement on the sidelines of the National Safety Awards function in New Delhi.
EPFO to be left with surplus despite paying hiked interest
On the sidelines of the event, Gangwar told reporters, "Ahead of the festival season, over 6 crore EPFO subscribers would get 8.65% interest for 2018-19."
According to estimates, EPFO would be left with Rs. 151.67 crore surplus after providing an 8.65% interest rate for 2018-19.
However, at 8.7% interest rate, there would have been a deficit of Rs. 158 crore.
EPFO sent proposal for 8.65% EPF rate in February
In February, the Central Board of Trustees (CBT)- EPFO's apex decision-making body- recommended hiking the rate to 8.65%.
The proposal to hike EPF rates was sent to the Finance Ministry for ratification, as is the convention.
However, the Ministry objected, wanting EPFO to reduce the rate by at least 10 basis points, which led to a delay in the Labor Ministry's notification.
Finance Minister does not disagree on this: Gangwar
Gangwar went on to say, "She does not disagree on this. The 8.65% rate of interest approved by us would be provided to EPFO subscribers for 2018-19. It should be done in a few days."
Gangwar also spoke about new infrastructure in J&K, Ladakh
Further, Gangwar also talked about the new infrastructure to be set up by bodies under the Labor Ministry in the Union Territories of J&K and Ladakh.
He said, "The Employees State Insurance Corporation would open a 30-bed hospital in Leh and a 100-bed hospital in Srinagar. Besides, the EPFO would open its offices in Srinagar and Jammu, and if needed in Leh also."
New infrastructure needed to facilitate implementation of 106 central laws
Reportedly, around 106 Central laws will have to be implemented in the two UTs from October 31, 2019, since J&K's special status was revoked last month. Hence, the Centre needs to set up infrastructure in the region to facilitate the implementation of the new laws.
We're working for over 40 crore unorganized sector workers: Gangwar
Furthermore, Gangwar also spoke on unemployment, noting that the workforce in establishments with at least 20 workers has increased from 6 crore three years ago to 8 crore.
"We are also working for over 40 crore unorganized sector workers in the country," he said, adding that the ministry is working on employment generation data from businesses with 1-2 people.