In blow to middle class, PF interest slashed to 43-year low of 8.1%

In a major blow to middle class Indians, the government’s Employees’ Provident Fund Organisation (EPFO) on Saturday slashed interest rates to 8.1 per cent for 2021-22 – the lowest in 43 years.

The interest rate this year is down from 8.5 per cent in 2020-2021; in 1977-78 it stood at 8 per cent.

The decision, which will affect more than five crore people, was taken after the EPFO’s trustees met under the chairmanship of Union Labour Minister Bhupender Yadav in Guwahati.

“The Employees’ Provident Fund Organisation’s apex decision-making body central board of trustees has decided to provide 8.1 per cent rate of interest on Employees Provident Fund for 2021-22 in its meeting held on Saturday,” a source told news agency Press Trust of India.

The decision will now be sent to the Ministry of Finance for concurrence. 

EPFO provides the rate of interest only after it is ratified by the government through the finance ministry.

In March 2020, EPFO had cut the rate to 8.5 per cent for 2019-20, from 8.65 per cent provided for 2018-19.