Bad news for people working in private sector
Private Sector; There is bad news for millions of people working in the private sector. Interest on PF may reduce in the coming days. This could weaken the only social security support for private workers.
EPFO suffers loss instead of surplus
According to the report, EPFO suffered a loss during the financial year 2021-22 even after estimating a surplus. It was believed that EPFO would have a surplus of Rs 449.34 crore whereas it had a loss of Rs 197.72 crore. It was decided to reconsider the interest rates offered on PF.
This is the stance of Finance Ministry on interest
At present the interest received on PF is already low. EPFO has fixed the interest rate on PF at 8.15 percent for the financial year 2022-23. The Finance Ministry believes that in view of the losses being incurred by EPF, there is a need to reconsider the interest rate of PF. There is a need to reduce the high interest rates of PF and bring them at par with the market rates.
More interest than PF only in this scheme
Now if we compare the interest on PF with the market, it is really very high. Among small savings schemes, there is only one Senior Citizen Savings Scheme which is currently getting more interest than PF. The interest rate of this scheme is currently 8.20 percent. Interest rates on everything from Sukanya Samriddhi Yojana to National Savings Certificate (NSC) are lower than PF. For this reason, the Finance Ministry has been advocating for a long time to bring the interest on PF below 8 percent.
In this way interest on PF reduced
If we look at the interest already received on PF, this rate is currently at a low level. Interest on PF is being reduced continuously. In the financial year 2015-16, the interest rate on PF was reduced from 8.80 percent to 8.70 percent. After protests by trade unions, it was reduced to 8.80 percent. After this, the interest rates on PF came down to a low level of 8.10 percent in 2021-22. In 2022-23, it was increased marginally to 8.15 percent.
Crores of subscribers of EPFO
PF is the biggest pillar of social security for crores of people working in the private sector. This helps in creating a fund for life after retirement. Lakhs of people are benefiting from good interest on PF. PF money is managed by EPFO i.e. Employees Provident Fund Organization. At present EPFO has more than 6 crore customers.
