The government, on Saturday, announced to maintain 8.5 percent interest rate for the 40 million subscribers of the employees' provident fund (EPF) scheme for 2006-07. This announcement would benefit over four crore EPF subscribers.

The Central government has accepted the July recommendation of the Central Board of Trustees.

The Commissioner of Central Provident Fund, A Vishwanathan said, “regional fund commissioners have been instructed to immediately implement the decision and issue the annual statement of accounts for 2006-07”.

The notification was issued after the Finance Ministry finally approved the EPF board’s recommendation

An 8.5 per cent interest on EPF deposits in 2006-07 would cost Rs 7,822 crore, though the deposits were expected to earn just about Rs 7372 crore. The deficit of Rs 449.90 crore would be met from the dipping into reserves and past earnings.

“The EPF Organisation (EPFO) would be left with a surplus of about Rs 83 crore while leaving aside Rs 56.69 crore in the special reserve fund,” said the board.

There have been proposals to spread the investment portfolio and putting in 5-10 per cent of the funds in stocks to improve returns on investment. The EPF board has not rejected this suggestion but has not approved it either, worried at the vision of exposing the fund to equity market volatilities.