<p>The Employees' Provident Fund Organisation (EPFO) on Saturday decided to decrease the interest on provident fund deposits for 2021-22 to 8.1%, the lowest in 44 years, two days after the BJP stormed back to power in four states and amid objections from the trade union representatives</p>.<p>This is the lowest since 1977-78, when the EPF interest rate stood at 8%. The interest rate for 2020-21 was 8.5%, which was lower than 8.65% in 2018-19.</p>.<p>There are around five crore subscribers in EPFO at present. The decision was taken at a meeting of the Central Board of Trustees (CBT) headed by Union Labour Minister Bhupender Yadav in Guwahati.</p>.<p>Sources said trade union representatives objected to the proposal of decreasing the interest rate, as it would have a direct impact on the savings of employees.</p>.<p>Defending the decision, Yadav said, "SBI provides for 5.45% interest for a 10 year deposit. We have similar instruments like PPF which give interest from 6.8% to 7.1%. This time, the Board has kept in mind the kind of international situation and the condition of the equity market while deciding on investing to ensure social security. We cannot take instruments with very high risk. We are not the people to market that, we are there for the stability of the market, for social security."</p>.<p>He added, "the Board has taken the decision to give 8.1% interest for 2021-22." </p>.<p>Responding to the decision, CPI(M) General Secretary Sitaram Yechury tweeted, "post these assembly election results, Modi government mounts further attacks on the working people with a vengeance. Resist this attack that comes in the background of mounting hardships with jobloses, price rise etc., with all our might."</p>.<p>Congress chief spokesperson Randeep Surjewala said, "the income of 84% of the people of the country has decreased. Is it right to attack the savings of crores of employees on the basis of electoral victory?...Is this the 'return gift' of BJP's victory?" </p>.<p>The EPFO had lowered the interest rate on provident fund deposits to a seven-year low of 8.5% for 2019-20.EPFO had provided 8.8% in 2015-16, 8.55% in 2017-18 and 8.65% per cent interest in 2016-17. It had given 8.75% in 2013-14 as well as 2014-15 while it was 8.5% for 2012-13. The interest rate was 8.25% in 2011-12. </p>.<p>The interest rates are decided by the Central Board of Trustees (CBT), which is binding on the EPFO, and sent to the Ministry of Finance for ratification. Only after the Ministry of Finance's ratification, the EPFO will issue directions to field offices to credit the interest income in the subscriber's account.</p>.<p>An official statement said the EPFO has consistently generated high returns over the last many years, despite following a "conservative approach" towards investment. This has enabled it to distribute higher interest to its subscribers, through various economic cycles with minimal credit risk, it said.</p>.<p>"Traditionally, EPFO has been able to give a higher rate of interest on retirement savings in comparison to other available investment options because of its prudent investment policy of investing in long tenor high yielding securities for the past several decades. This has ensured that the returns on EPFO’s investments are higher even when the yields have been steadily coming down in the past decade," it said.</p>.<p><strong>Check out DH's latest videos</strong></p>
<p>The Employees' Provident Fund Organisation (EPFO) on Saturday decided to decrease the interest on provident fund deposits for 2021-22 to 8.1%, the lowest in 44 years, two days after the BJP stormed back to power in four states and amid objections from the trade union representatives</p>.<p>This is the lowest since 1977-78, when the EPF interest rate stood at 8%. The interest rate for 2020-21 was 8.5%, which was lower than 8.65% in 2018-19.</p>.<p>There are around five crore subscribers in EPFO at present. The decision was taken at a meeting of the Central Board of Trustees (CBT) headed by Union Labour Minister Bhupender Yadav in Guwahati.</p>.<p>Sources said trade union representatives objected to the proposal of decreasing the interest rate, as it would have a direct impact on the savings of employees.</p>.<p>Defending the decision, Yadav said, "SBI provides for 5.45% interest for a 10 year deposit. We have similar instruments like PPF which give interest from 6.8% to 7.1%. This time, the Board has kept in mind the kind of international situation and the condition of the equity market while deciding on investing to ensure social security. We cannot take instruments with very high risk. We are not the people to market that, we are there for the stability of the market, for social security."</p>.<p>He added, "the Board has taken the decision to give 8.1% interest for 2021-22." </p>.<p>Responding to the decision, CPI(M) General Secretary Sitaram Yechury tweeted, "post these assembly election results, Modi government mounts further attacks on the working people with a vengeance. Resist this attack that comes in the background of mounting hardships with jobloses, price rise etc., with all our might."</p>.<p>Congress chief spokesperson Randeep Surjewala said, "the income of 84% of the people of the country has decreased. Is it right to attack the savings of crores of employees on the basis of electoral victory?...Is this the 'return gift' of BJP's victory?" </p>.<p>The EPFO had lowered the interest rate on provident fund deposits to a seven-year low of 8.5% for 2019-20.EPFO had provided 8.8% in 2015-16, 8.55% in 2017-18 and 8.65% per cent interest in 2016-17. It had given 8.75% in 2013-14 as well as 2014-15 while it was 8.5% for 2012-13. The interest rate was 8.25% in 2011-12. </p>.<p>The interest rates are decided by the Central Board of Trustees (CBT), which is binding on the EPFO, and sent to the Ministry of Finance for ratification. Only after the Ministry of Finance's ratification, the EPFO will issue directions to field offices to credit the interest income in the subscriber's account.</p>.<p>An official statement said the EPFO has consistently generated high returns over the last many years, despite following a "conservative approach" towards investment. This has enabled it to distribute higher interest to its subscribers, through various economic cycles with minimal credit risk, it said.</p>.<p>"Traditionally, EPFO has been able to give a higher rate of interest on retirement savings in comparison to other available investment options because of its prudent investment policy of investing in long tenor high yielding securities for the past several decades. This has ensured that the returns on EPFO’s investments are higher even when the yields have been steadily coming down in the past decade," it said.</p>.<p><strong>Check out DH's latest videos</strong></p>
