New Delhi: The Government is likely to take a "favourable" decision on enhancing the interest rate on Employees Provident Fund (EPF) and the Ministries of Labour and Finance are holding discussion on how to mobilise resources for it, Lok Sabha was informed today (Dec 6, 2004).

"Government is looking into the matter for a favourable decision ... steps are being taken towards a favourable decision in this regard," Home Minister Shivraj Patil, who was replying to a question on behalf of Labour Minister Chandrasekhar Rao, said during Question Hour.

He said that if the interest on EPF was eight per cent, the present surplus fund with the EPF Organisation (EPFO) was sufficient. However, if it was 8.5 per cent, there would be a deficit of Rs 206 crore. For nine per cent, the deficit would be Rs 566.8 crore and for 9.5, it would be Rs 927.15 crore.

Patil said that the Central Board of Trustees of EPF had recommended interest rates of 9.5 and nine per cent plus an additional Golden Jubilee Bonus interest of 0.5 per cent for the years 2002-03 and 2003-04 respectively.

In reply to a question, he said that the Government had so far not issued any notification on the rate of interest to be paid to EPF members for 2002-03, 2003-04 and 2004-05.

While refusing to comment on why the notification was not issued in the past three years during the NDA (National Democratic Alliance) rule, Patil said that the Labour and Finance Ministries were holding parleys to see how to mobilise resources for giving an enhanced rate.

He said that several employers had not contributed towards the EPF and action was being taken in this regard.

Patil informed the House that 70 per cent of EPF investment was done in special deposit schemes and precaution was taken on investments in private schemes.