On 10 February, the Employees Provident Fund Organisation (EPFO) has announced an 8.25% interest rate on employees’ provident fund for the financial year 2023-24. This marks a three-year high for the retirement fund body. The decision will benefit the members of it. This proposed rate marks an increase from the current rate of 8.15%. This is a three year hike of the interest rate from the retirement fund body.
Union Labour Minister Bhupendra Yadav said, “This decision is a step forward in keeping Prime Minister Modi’s promise to make sure that India’s workers have better social security.”
In March 2023, EPFO increased the interest rate on EPF to 8.15 percent for 2022-23, compared to 8.10 percent in the previous year. However, in March 2022, it reduced the interest rate on EPF for 2021-22 to 8.1 percent, the lowest since 1977-78 when it stood at 8 percent.
Decision by Central Board of Trustees (CBT) on the hike of EPFO decision
The decision to set the interest rate at 8.25 percent for 2023-24 was made by the EPFO’s apex decision-making body, the Central Board of Trustees (CBT), during its meeting on Saturday, February 10. This decision underscores the Board’s commitment to providing optimal returns to EPF subscribers a source said to the PTI.
Government Ratification Process
Following the CBT’s decision, the proposed interest rate for 2023-24 will submitt to the Ministry of Finance for concurrence. Once ratified by the government, the increased interest rate will be credited into the accounts of over six crore EPFO subscribers.
Historical Context of EPFO Decision on the EPF interest rate
In the year 2020 March, the EPFO reduced the interest rate on provident fund deposits to a seven-year low of 8.5 percent for 2019-20, down from 8.65 percent in 2018-19. Over the years, EPFO interest rates have varied, with rates such as 8.65 percent in 2016-17, 8.55 percent in 2017-18, and a slightly higher 8.8 percent in 2015-16. In 2013-14 and 2014-15, the retirement fund body provided a higher interest rate of 8.75 percent, compared to 8.5 percent for 2012-13, while the rate was 8.25 percent in 2011-12.
Steadfast Government Support
The decision to propose a higher interest rate on EPF deposits reaffirms the government’s unwavering support for the financial security of the workforce. By prioritizing the interests of EPF subscribers, the government aims to ensure their long-term financial stability and prosperity.
Conclusion
The proposed increase in the interest rate on EPF deposits for the financial year 2023-24 reflects the government’s commitment to fostering social security and financial well-being for all employees. With this decision, EPFO subscribers can anticipate enhanced returns on their PF investments, contributing to their overall financial security and stability.
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