EPFO UPDATE: Finance Minister Nirmala Sitharaman on Monday defended a proposal to cut interest rate paid on employees’ provident fund deposits to over four-decade low of 8.1%, saying the rate is dictated by “today’s realities” where interest rate on other small saving instruments was even lower.
She said the interest rate on the Sukanya Sammriddhi Yojana is at 7. 6%, the senior citizens saving scheme is at 7. 4%, PPF is at 7. 1%. The FM said the highest interest rate for some of SBI’s fixed deposit portfolios is at 5. 6% and it has a mark up for senior citizens which takes it 6. 3%. The government borrowing through the G-secs on an average across various tenors is at 6. 28%.
“With all these, the EPFO has taken a call to give it at 8. 1%. The fact that EPFO’s which has representatives from various stakeholders for the pension fund,” the FM said stressing that it’s a decision taken by the central board in which representatives of the various segments which are part of the EPFO are all seated in the board, including representatives of workers’ representatives, management representatives, government representatives all of them are seated in the board.
On excess spending approval being sought, the FM said that the government has borne higher cost of urea, and not passed it on to farmers. She mentioned that the devolution of state share in central taxes is projected at Rs 8. 17 lakh crore in FY23, and the revised estimate of Rs 7. 45 lakh crore for FY22 has already been released. Responding to concerns on inadequate spending on defence, the minister stated that for 10 years nil defence procurement happened under the UPA rule.
During the debate, Congress Rajya Sabha member Shaktisinh Gohil hit out at the government for spending on the Central Vista project at atime when the Centre doesn’t even have money to pay states their share of GST revenue.
