The Narendra Modi government may not tinker with interest rates on the Employees Provident Fund Organisation (EPFO) anytime soon. The interest rates will remain at 2017 level of 8.65 percent, according to a report in The Indian Express. Instead, what the Modi government will do is dip into shares held by the EPFO for the extra 0.15 percent payout, the report said.
With a fragile victory in the Gujarat elections, and the general elections in 2019, the the Modi government is unlikely to do anything that will upset people. In 2015, EPFO brought some shares which the government is planning to sell for the additional 0.15 percent payout, the IE report said.
The government is considering to raise equity investment for EPFO from 15 percent to 25 percent to explore wider investment options to maximize returns, The Economic Times had reported earlier.
Sources told Indian Express that shares worth Rs 2000 cr would be sold by the EFPO. This would be done for an additional income of Rs 850 crore due to the markets doing well. The additional income would be part of total earnings to determine PF rate, the IE report said.
Updated Date: Jan 22, 2018 09:37 AM