New Delhi: The finance ministry has accepted the Central Board of Trustees’ recommendation to set the annual interest rate on the Employees’ Provident Fund at 8.15% for FY23, marking a slight increase from the previous year.
The Central Board of Trustees had on 28 March recommended setting an 8.15% interest rate on provident funds for FY23, a 0.05% hike in the interest rate from FY22, when it stood at 8.10%. The interest rate stood at 8.50% in FY21.
The ministry of labour and employment, in a circular issued on Monday, directed relevant authorities to issue necessary instructions for crediting the interest into members’ accounts.
The recommendations entail distributing over ₹90,000 crore to members’ accounts on a total principal amount of approximately ₹11 trillion during FY23, up from ₹77,424.84 crore and ₹9.56 trillion, respectively, during FY22. The statutory body will be left with a surplus of ₹663.91 crore after the payout for FY23.
“The total income recommended for being distributed is the highest to date. The growth in income and the principal amount is respectively more than 16% and 15% as compared to the last financial year 2021-22,” the labour ministry said in a statement in March after CBT made the recommendations.
The ministry then sent the recommendations to the finance ministry for ratification. With the government’s approval, the EPFO will now begin to pay the interest to EPF subscribers.
According to government data, EPFO added 1.72 million net members during April, with around 847,000 new members coming under social security coverage of EPFO for the first time during this period. EPFO has over 60 million subscribers.
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Updated: 24 Jul 2023, 10:59 PM IST
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