The employees' provident fund interest rate has been slashed to 8.1 per cent for 2021-22; this is the lowest rate since 1977-78, when it was 8 per cent. The interest rate was 8.5 per cent in 2020-21. This will impact about five crore subscribers. The decision to cut the interest rate will be sent to the Ministry of Finance for its concurrence. Any such EPFO decision must be ratified by the government through the finance ministry. Labour Minister Bhupender Yadav, while elaborating on the board's decision, said that the interest rate was finalised after keeping in mind the prevailing international conditions and the market situation.
Taking a swipe at the government, the Congress on Saturday said the reduction in EPFO interest rate was a "return gift" of the BJP to people following its victory in the just-concluded Assembly polls. "The income of 84 per cent people of the country has decreased. Is it right to attack the savings of crores of employees on the basis of an electoral victory?" asked Congress general secretary and chief spokesperson Randeep Surjewala.
Provident fund savings are mandatory; at least 12 per cent of an employee's basic salary is compulsorily deducted and is saved in provident fund; to this, an employer co-contributes an equal amount.