Since today's announcement is an interim one, CBT will meet again later to discuss the possibility of any further increase in interest rates.
Chennai: The employees' provident fund will earn a higher interest rate of 8.8 percent for 2015-16, marginally up from the existing 8.75 percent.
There has been demand to hike the PF interest rate to 8.90 percent.
Union Labour Minister Bandaru Dattatreya said the hike is an 'interim one' and indicated that it could be further revised later.
There is global slowdown and interest rates in India are also coming down, the minister said, adding that the Reserve Bank of India and other central government organisations are monitoring the market trends.
"We had last time given 8.75 per cent and this time, seeing the situation, we are declaring 8.8 per cent for the workers," he told reporters after chairing the 211th meeting of the Central Board of Trustees (CBT) of the Employees' Provident Fund Organisation (EPFO).
While trade unions had demanded that the interest rate be fixed at 8.90 percent, the government had revised it to 8.80 percent, he said, underlining the Centre's commitment to the working class.
"That is our motto. We don't want to have a backward outlook. We want a forward outlook. We want to safeguard the workers' interest. We want to give a real and purposeful picture before the workers and that is why a long debate took place today," he said.
On trade unions' demand for 8.9 percent interest rate, he said, if that was implemented, the 'surplus' the government will have would be Rs 285 crore. And in the case of 8.8 percent, the surplus will be Rs 673 crore, he explained.
Since today's announcement is an interim one, CBT will meet again later to discuss the possibility of any further increase in interest rates, he said, adding that he only favoured further revision of interest rates.
That meeting is likely to take place after audit of accounts, officials said.
All India Trade Union Congress Secretary D L Sachdev and EPFO trustee said, "The Labour Ministry has succumbed to the pressure of the Finance Ministry to keep interest on PF deposits at lower rate than recommended by the Finance, Audit and Investment Committee (FAIC)."
Sachdev attended today's meeting of the Central Board of Trustees' headed by Dattatreya.
EPFO's advisory body FAIC had recommended that 8.95 percent rate of interest on PF deposits for 2015-16 was feasible as it would leave a surplus of Rs 91 crore.
According to the EPFO estimates, providing 9 percent rate of interest would have resulted in a deficit of Rs 102 crore.
Sachdev said, "It appears that the Labour Ministry top brass is not acting like a trustee of poor workers."
"The representatives of employees present at the meeting have protested against deciding 8.8 percent rate of interest for the current fiscal," said Bharatiya Mazdoor Sangh representative P J Banasure.
The others who voiced concern over the decision include Ashok Singh (Indian Trade Union Congress), Shankar Saha (All India United Trade Union Centre) and Jagadeeswara Rao (BMS).
Earlier, the minister unveiled the Simplified Pension Claim Form 10 D and a single-page Pension Payment Order (PPO).
The single-page PPO replaces the current 8-page format and is part of the Centre's efforts to simplify forms and procedures. While it will ensure lesser processing time and provide ease of convenience and handling at EPF offices, it will also be simpler and comprehensible for members and pensioners, the minister said.
Dattatreya also launched the Compliance Analysis and Monitoring System for establishments.