Protest against lower interest rate on PF successful: Trade unions

Chennai, April 29 (IANS) Central trade union leaders on Friday expressed satisfaction on the success of their one-day protest against the government's decision to offer 8.7 percent interest instead of 8.8 percent recommended by the Employees Provident Fund Organisation (EPFO), with the higher rate being retained.

"The protest was successful with workers across the country participating in it," Centre of Indian Trade Union (CITU) president A.K. Padmanabhan told IANS over phone on Friday.

Padmanabhan is also a member of the Central Board of Trustees (CBT) of EPFO.

"We oppose even a slight reduction in the interest rate after the recommendation by the CBT. The CBT had recommended 8.8 percent whereas the central government reduced it to 8.7 percent," All India Trade Union Congress (AITUC) general secretary D.L. Sachdev told IANS.

He also termed the Friday protest call by the central trade unions as successful.

According to Padmanabhan, the argument that interest rates on public provident fund (PPF) and other small savings schemes have come down and the employees provident fund interest rate cannot be immune is not sustainable.

"The corpus belongs to the workers and the interest is paid out of income from the corpus," he said.

As the government decided to agree to 8.8 percent interest rate, Padmanabhan said this is the third time the BJP-led central government is backtracking on its decision faced with strong opposition.

He said EPFO has the necessary funds to pay higher interest rate.

"The CBT of EPFO is the final authority on the all matters. As per the EPF Act, the CBT has the full powers. All these years the central government agreed to the recommendations of the CBT," Padmanabhan said.

According to him, even with offering an interest rate of 8.95 percent, the EPFO will have a surplus of around Rs.91 crore.

Sachdev meanwhile claimed that the central government "wants to dilute the PF and direct the funds to New Pension Scheme and also to the stock markets". "Social security schemes cannot be left to the vagaries of the stock market," he said, adding that the government seems to be going towards the goal of making PF as an optional scheme for the workers which is not good.