Friday, December 2 2005 18:37 Hrs (IST) - World Time -

New Delhi: Government today (December 02, 2005) said there was no proposal to revise the interest rate on provident fund for government and private sector employees (GPF and PPF) from the present eight per cent, and the EPF rate for 2005-06 is yet to be decided by the Central Board of Trustees.

"There is no proposal under consideration of government to revise the rate of interest on GPF, which has been retained at eight per cent for 2005-06 at par with that of 2003-04 and 2004-05, or the rate of interest on PPF, which has been pegged at eight per cent since 2003-04," Minister of State for Finance, S S Palanimanickam, informed the Lok Sabha.

In case of Employees Provident Fund, he said the CBT has not made any recommendation in respect of interest rate on EPF accumulations for the year 2005-06.

On the "indirect impact" of change in exchange rate and interest rates abroad on Indian economy, he said "any large adjustments in the exchange rates of major currencies are not expected to result in disruption in the Indian foreign exchange market."

Presently, he said "India does not have capital account convertibility, and fluctuations in interest rates overseas may not have a direct immediate impact on the local economy."

"The fiscal and monetary policies are geared to minimise any adverse impact on such fluctuations," he added.

While asserting that interest rates were stable, as RBI has kept Bank Rate unchanged in the busy season credit policy, he said RBI has raised the upper limit of rates on fresh Repatriable non-resident external rupee deposit account (NRE) for 1-3 years to Libor plus 0.75 per cent in November from Libor plus 0.50 per cent.