The government was forced to take a U-turn on the Employee Provident Fund (EPF) issue yet again on Friday when it increased the rate to 8.8 per cent from 8.7 per cent decided earlier. The Central Board of Trustees (CBT) had originally recommended 8.8 per cent.
The rollback comes after the Finance Ministry and the Labour Ministry were locked in an intense tussle over the rate of interest on EPF deposits for 2015-16 with the former pegging the rate at 8.7 percent, 10 basis points lower than decided by the EPFO.
The Finance Ministry also defended its decision to pay 8.7 percent interest on EPF, saying last year’s surplus would have to be used to pay this rate.
This is the third time the government is forced to take back his decision on the EPF issue since February. First was when the government proposed in the 2016 Union Budget to tax 60 per cent of the EPF corpus, which it had to roll back almost immediately on account of mass protests.
Second was when the amendment on the age limit to withdraw the retirement corpus to 58 years from 54 earlier was brought in, only to roll back after trade unions protested.
