Mumbai: The news is breaking about a huge relief to the salaried citizens of India; millions of accounts holding Provident Fund (PF) are expected to get their interest payments this week. Labour Minister Mansukh Mandaviya announced, on May 16, 2023, that the Employees Provident Fund Organisation (EPFO), which manages national retirement funds, would complete within the week the transfer of the newly acquired 8.25% interest rate, representing the financial year 2024–25, into the accounts of those members who would have eligibility.
Since EPFO is the custodian of retirement savings in the organised sector, it has the right to charge interest on accounts at the end of each year, subject to sanction by the central government. According to Mandaviya, by July 8, 2023, the organisation had already revised its interests, from 323.9 million members to 1.386 million establishments. Such operations include 96.51 percent of all subscribers and 99.9 percent of registered employers. The 8.25 % interest rate was approved by the government on 22 May 2023 and the EPFO started payment processing on the night of 6 June 2023, directly.
The annual interest distribution this year has been quickened, but the previous year crediting date was stretched over a long time between August 2023 and December 2023. Mandaviya explained this by stating, “We have streamlined the system to process faster, and we have updated most accounts in June.” He is sure that the remaining balances, which involve only a small number of establishments, will be paid before the week ends.
The interest rate for 2024-25 remains at 8.25%, the same as the previous fiscal year. This rate was set by the EPFO on February 28, 2023, and processed by the Finance Ministry. The move guarantees the 335.6 million PF account holders who are dependent on such provisions to save long-term and pump into future retirement plans.
A Provident Fund is an important aspect of financial security for salaried labour in India; it is part of the protection of the combined contributions of the employee and the employer.
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