EPFO likely to credit 8.5pc interest on EPF for 2019-20 by Dec

New Delhi: Net new enrolments with retirement fund body EPFO grew by 27.79 per cent to 13.36 lakh in January compared to the same month in 2020, according to the payroll data released on Saturday, providing a perspective on formal sector employment amid the coronavirus pandemic. "The provisional payroll data of EPFO published on 20th March, 2021, highlights a growing trend of subscriber base with the addition of 13.36 lakh net subscribers during the month of January 2021," a labour ministry statement said. It stated that the data reflects growth of 24 per cent for the month of January 2021 over December 2020. "Year-on-year comparison of payroll data indicates an increase of 27.79 per cent in net subscribers’ as compared to the corresponding period last year (January 2020), indicating return to the pre-Covid levels of subscriber growth for EPFO," the ministry stated. Despite COVID-19 pandemic, the EPFO added around 62.49 lakh subscribers during the first ten months of 2020-21, the data showed. During 2019-20, the number of net new subscribers rose to 78.58 lakh as compared to 61.12 lakh in the preceding fiscal, the data showed.

New Delhi: Earlier in September this year, the Employees Provident Fund Organisation had decided to split 8.5 per cent interest into two installments of 8.15 per cent and 0.35 per cent in its trustees meet headed by Labour Minister Santosh Gangwar.

A highly placed source told PTI that the Labour Ministry has sent a proposal to the Finance Ministry to give concurrence to credit 8.5 per cent rate of interest on EPF for 2019-20 earlier this month. ”The Ministry of Finance ratification is likely in few days. Thus the interest is likely to be credited by this month only.” The source further said that earlier the Ministry of Finance had sought some clarifications on the rate of interest for the last fiscal, which were duly addressed.

In March this year, the EPFO’s apex decision making body Central Board of Trustees headed by Labour Minister Santosh Gangwar had approved 8.5 per cent interest rate on EPF for 2019-20. In a virtual CBT meeting in September, the EPFO had decided to honour its commitment to provide 8.5 per cent rate of interest for the last fiscal. But the CBT had also decided to split the rate of interest into two installments of 8.15 per cent and 0.35 per cent in view of the pandemic.

The labour ministry had then explained that ”in view of exceptional circumstances arising out of COVID-19, the agenda regarding interest rate was reviewed by the CBT and it recommended the same rate of 8.50 per cent to the Central Government. ”It (8.5 per cent interest) would comprise of 8.15 per cent from debt income and balance 0.35 per cent (capital gain) from the sale of ETFs (exchange traded funds) subject to their redemption by 31st December, 2020,” it had said.

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