NEW DELHI: RSS-affiliated trade union Bharatiya Mazdoor Sangh (BMS) today opposed the cut in EPF interest rates by the Finance Ministry, terming it as "encroachment" in the Fund's functioning and decided to hold protests across the country.
"BMS strongly condemns the cut in EPF interest rates and will hold demonstrations at EPF offices on April 27," Sangh general secretary Virjesh Upadhyay said, adding, the Fund is managed by the Central Board of Trustees (CBT), an independent and autonomous body.
He said the Finance Ministry has no business "interfering" in the Fund's functioning as it is neither funding it nor managing it.
"The step taken by the Finance Ministry to overrule the recommendation of the Central Board of Trustees is not acceptable. It is a wrong step and is an encroachment by the Finance Ministry in EPF's functioning.
"The Government of India has no prerogative in the functioning of the EPF which is managed by an autonomous and independent body - the Central Board of Trustees of EPFO," Upadhyay said.
The BMS leader said "we are unable to understand why the government has further reduced the interest rate, as recommended by the CBT. Why does the government have to approve this when it is neither funding it nor managing it?"
He said the interest rate is decided by the Trust on the basis of earnings made on investments by EPF and it had recommended an interest rate of 8.8 per cent for 2015-16.
He said even if "the EPF gives a 8.95 per cent interest, even then there is saving of more than Rs 100 crore".
The Finance Ministry has approved 8.7 per cent interest on EPF deposits for over 5 crore subscribers of retirement body EPFO, lower than 8.8 per cent proposed by the CBT.
"The CBT had, at its meeting held in February 2016, proposed an interim rate of interest at 8.8 per cent to be credited to the accounts of Employees' Provident Fund subscribers for 2015-16. The Ministry of Finance has, however, ratified an interest rate of 8.7 per cent," Labour Minister Bandaru Dattatreya said.