The third crucial meeting of the EPF Board began in New Delhi on Tuesday to decide on the interest rate for its 3 crore (30 million) subscribers for this year amidst some trade unions' demands for 12 per cent interest against 9.5 per cent offered during 2003-04.
The Central Board of Trustees of the Employees' Provident Fund Organisation is weighing all options to arrive at 'mutually agreeable' returns to be offered for 2004-05.
Two CBT meetings earlier, chaired by Labour Minister Sis Ram Ola, could not arrive at a consensus on the interest rate.
The CBT includes members from employers, employees and governments (state and Centre).
Ruling out differential rates, a sub-committee of EPFO as well as the finance ministry held that any returns over 8 per cent will be unsustainable.
While the Congress-backed INTUC was agreeable to 8.25 per cent, the CPI(M)-affiliated CITU and Sangh Parivar-clan BMS pressed for 12 per cent and CPI's AITUC pitched for retaining 9.5 per cent.
According to EPFO, 12 per cent return would lead to an unfunded gap of Rs 2,729 crore (Rs 27.29 billion) between interest earned and spent and 9.5 per cent would lead to an unfunded gap of Rs 927 crore (Rs 9.27 billion). Only at 8 per cent, it would be able to earn a surplus of Rs 154 crore (Rs 1.54 billion).
The recommendations of the CBT would go to the finance ministry for ratification, after which the labour ministry would issue a notification.