EPFO cut interest rate to 8.1 per cent for 2021-22

Employees' provident fund interest rate for 2021-22 has been slashed from the existing 8.5 per cent to 8.1 per cent for 2021-22 on Saturday. This is the lowest rate since 1977-78, when it was 8 per cent. The decision was taken during the meeting of the EPFO's central board of trustees, which was held in Guwahati. Labour minister Bhupender Yadav said that the interest rate was finalised after keeping in mind the prevailing international conditions and the market situation. "We made the recommendation of 8.1 per cent interest rate after reviewing the prevailing market situation as well as the international scenario. Also we cannot take high risk instruments as we have to keep social security and market stability in mind, and therefore the decision was taken," Mr Yadav said after the board's meeting.

जिस प्रकार की अंतरराष्ट्रीय परिस्थिति और equity बाज़ार की स्थिति बनी है, उसमें निवेश के साथ सामाजिक सुरक्षा को भी रखना है। हम बहुत हाई रिस्क वाले इंस्ट्रुमेंट को नहीं ले सकते है। वो मार्केट करने के लिए हम लोग नहीं है, हम मार्केट की एक स्थायित्व, सामाजिक सुरक्षा के लिए है। pic.twitter.com/b9P6FAEZKn

— Bhupender Yadav (@byadavbjp) March 12, 2022

The board's recommendation will be sent to finance ministry soon. EPFO has about 5 crore subscribers. The COVID-19 pandemic has strained EPFO’s earnings. EPFO delayed payments for 2019-20 and paid the interest in two installments, deriving from two sources of its investments — 8.15 per cent from debt investments and 0.35 per cent from the equity portfolio.