The EPFO's Central Board of Trustees (CBT) is meeting on Monday, where a decision on the interest rate is expected. Last year, the rate was 8.25%. It was raised to 8.25% in fiscal year 2024. Interest rates were 8.15% in 2023 and 8.1% in 2022, the lowest in four decades.

New Delhi: Important news for the EPFO's 310 million subscribers. The EPFO's Central Board of Trustees (CBT) is expected to recommend an interest rate of 8.2 to 8.25 percent this year. This decision was made due to declining stock market returns and bond yields, as well as higher claim settlements. Last year, the rate was 8.25 percent. It was increased to 8.25 percent in fiscal year 2024. Prior to that, interest rates of 8.15 percent were recommended in 2023 and 8.1 percent in 2022, the lowest in four decades.

The CBT is scheduled to meet on Monday. According to a TOI report, a CBT member said that due to global turmoil, stock markets and equities have not performed well this year. Most of the EPFO's funds are invested in government bonds , but yields there have also been poor. Therefore, income is likely to be lower.

What is the whole process?

The Board's Investment Committee will also meet on Monday before the CBT meeting. It will discuss the EPFO's income and expenditure profile and decide on the interest rate. The CBT meeting will be chaired by Labor Minister Mansukh Mandaviya. After receiving approval from the CBT, the interest rate will also need to be approved by the Finance Ministry. It will then be credited to subscribers' accounts in the middle of the next financial year.

The RBI has cut the repo rate in recent months, while the government has kept interest rates on small savings schemes unchanged. Deepak Jaiswal, national president of the National Front of Indian Trade Unions, said that the Vikasit Bharat Rojgar Yojana (Development India Employment Scheme) has added millions of new workers last year, boosting the investment corpus. Furthermore, the EPFO ​​has a significant income surplus from the previous financial year. Therefore, the government should not cut interest rates.

 PC:NBT