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New Delhi, Jan 22: The interest rate on provident fund (PF) deposits is likely to remain unchanged as the government is working on keeping it at last year’s level of 8.65 per cent. The government would dip into the shares held by the Employees Provident Fund Organisation (EPFO) for the extra 0.15 percent payout to keep PF rates unchanged at 8.65 per cent, said a newspaper report.
In 2015, EPFO had brought some shares which the government is planning to sell for the additional 0.15 percent payout to shore up the PF return at 8.65 percent, the report said. Shares worth Rs 2000 crore would be sold by the EFPO. This is likely to bring an extra income of Rs 850 crore and the government would include this amount in its total earnings to determine the PF rate.
“The Central Board of Trustees of EPFO would be meeting next month to finalise the PF rate and the modalities of the share sale. We will be asking the fund managers to cut down their commission to pass on the maximum benefit to the PF subscribers,” sources told Indian Express. “We are aiming to keep the rate unchanged from last year,” they added. However, the final (income) number would depend on the share prices on the day of the sale by the EFPO.
Earlier, an Economic Times report had said that the government is considering to raise equity investment for EPFO from 15 percent to 25 percent to explore wider investment options to maximize returns. The EFPO provided 8.65 per cent interest for the fiscal year 2016-17, down from 8.8 per cent in 2015-16 and 8.75 per cent in 2013-14 and 2014-15.