Congress leaders hit out at PM Modi over EPF interest rate reduction to 8.1 per cent

New Delhi:

Congress leaders including former party chief Rahul Gandhi on Saturday lashed out at the Bharatiya Janata Party-led Centre for approving the reduction in provident fund deposits for 2021-22.

Senior Congress leader Rahul Gandhi on Saturday made a sarcastic comment against Prime Minister Narendra Modi over the name of the latter’s residence adding that the motive of the saffron party is to increase inflation. 

“Keeping the name of the house as ‘Lok Kalyan Marg’ does not bring welfare to the people. The Prime Minister has implemented the model of ‘Raise the prices, lower the wages’ to ruin the present and future of 6 and a half crore employees,” he tweeted.

Meanwhile, Indian Youth Congress national president Srinivas BV on Friday shared a report of NEWS24 saying that the interest rate on EPF has been lowest in last 44 years. 

“Now-a-days everything is happening for the first time in the country,” he tweeted. 

The Centre approved reduction of interest rate on Employees’ Provident Fund (EPF) deposits from 8.5 per cent to 8.1 per cent for 2021-22 for around 6 crore customers. The decision, taken by the EPFO in March this year, brings down the interest rate on PF deposits to the lowest level in over four decades.

The Union Labor Ministry had sent the proposal to the Finance Ministry. Now, after the ratification of the interest rate by the government, EPFO will start depositing fixed interest rate for the financial year in the EPF accounts. The lowest interest rate before this was in 1977-78, when it was 8 per cent.

EPFO invests 85 per cent of its annual accruals in debit instruments including government securities and bonds and 15 per cent in equities through ETFs. Income from both debit and equity is used to calculate interest payments.

The interest rate was slightly higher at 8.8 per cent in 2015-16. It had given 8.75 per cent interest in 2013-14 as well as 2014-15, which is higher than 8.5 per cent in 2012-13. The interest rate in 2011-12 was 8.25 per cent. 12% of the amount made by adding basic salary and dearness allowance of an employee is deposited in his PF account. Out of 12% of the company’s contribution, 3.67% goes to the employee’s PF account (EPF) and the remaining 8.33% goes to the Employees’ Pension Scheme (EPS).

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