Ahead of the formation of the Congress-led coalition government, the Communist Party of India (Marxist)-affiliated Centre of Indian Trade Unions on Wednesday demanded that the 9.5 per cent interest for the over 3.2 crore (32 million) provident fund subscribers be retained.
"There is no rationale for offering lower interests. It (9.5 per cent interest) should be retained," CITU president and CPM politburo member M K Pandhe told PTI.
Pointing out that the finance ministry under the National Democratic Alliance had suggested to the Central Board of Trustees of Employees Provident Fund Organisation that interest rate should be cut to 8 per cent, Pandhe said it was not in the interest of the working class.
The proposal for offering 8 per cent interest comes in the wake of lower returns of 8 per cent being offered in the small deposits scheme, which accounts for 80 per cent of the EPFO's investment portfolio.
EPFO had cut the interest rate by 0.5 per cent to 9 per cent but offered a golden jubilee bonus of 0.5 per cent, thus retaining the returns at 9.5 per cent for the last financial year.
Terming the cut and the bonus as a "jugglery" by the outgoing Labour Minister Sahib Singh Verma, Pandhe questioned the rationale behind it.
Going by what EPFO had decided for 2003-04, it would translate into 0.5 per cent lower interest rate for the EPFO subscribers for this year.