Monday, February 20 2006 15:08 Hrs (IST) - World Time -

New Delhi: The Government today (Feb 20,2006) said it is not considering any proposal to increase the rate of interest on the Special Deposit Scheme, in which most of the Employees Provident Fund is parked.

"There is no proposal under consideration to increase the rate of interest on SDS, which has been fixed after due considerations," Minister of State for Labour Chandra Sekhar Sahu told Lok Sabha in a written reply.

The total outstanding balance under the SDS is estimated at Rs 1,19,748.13 crore as per revised estimates of 2004-05, he said.

Since corpus of the scheme, created in 1975, is frozen, no accretions are estimated during 2005-06, he said.

There has been demand to increase the rate of interest on the scheme so that the EPF rate is increased to 9.5 per cent.

Last month, the Government had notified 8.5 per cent rate of EPF interest for the current fiscal.

Even at this rate of interest, the EPFO has to meet the of Rs.365.89 crore from its own resources.

The total payout would be Rs 6,889.04 crore as interest to its four crore subscribers for the current fiscal against its projected interest income of Rs 6,523.15 crore.

EPFO had a corpus of Rs 72,000 crore till March 2004, which grew to Rs 79,000 crore by March 2005.

The Finance Committee of the EPFO had recommended 8 per cent interest on EPF for this fiscal, which was supported by the Government but employees' unions stuck to their demand of 9.5 per cent.