Left parties won't give up on EPF rate cut / Dec 23, 2005 / The Economic Times
From Indiapensions
Left parties won't give up on EPF rate cut
AMITA SHAH AND AARTHI RAMACHANDRAN
NEW DELHI: That the Congress-Left amity is vulnerable to economic policy was once again demonstrated today when the 61-member Left bloc organised support of natural allies — 37-member SP and 16-member DMK — for its fight against the Manmohan Singh government’s decision to cut the EPF interest rate.
The support of 114 MPs for the Left’s position on the EPF is significant, but the prime minister appeared not ready to give in to the pressure from the allies. The government’s tactics is predicated on a reading that the Left is neither prepared nor willing for any “agitation” or “movement” against the government.
The prime minister has been defending the board decision as the rate cut brings returns on PF in line with market trends. The yield on investments by Employees’ Provident Fund Organisation’s central board of trustees is around 8.25-8.30%. At 8.5%, the EPFO faces a shortfall of around Rs 370 crore during the year as its income is estimated at Rs 6,523 crore, while liability is pegged at Rs 6,889.04 crore. The EPFO’s finance and investment committee had recommended an 8%, which would have left a surplus of Rs 39.35 crore.
The Left walked out of the Lok Sabha when the junior minister for labour defended the rate cut. “About five crore people are being affected by this reduction. We demand that the interest rate on EPF be restored to 9.5%,” Left MPs Rupchand Pal and Gurudas Dasgupta told reporters after their meeting with the prime minister.
But Mr Dasgupta conceded that the prime minister gave “no assurance” but said he would look into the matter.Mr Dasgupta said if no action was taken by the government, all trade unions would call for a joint action and take the battle to the streets
“How long can we wait? They (government) had told us three months ago that they are considering our demand. We can’t wait endlessly,” the CPI leader said.
