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EPF interest rate decision put off |
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The Central Board of Trustees of the Employees Provident Fund Organisation has deferred a decision on the rate of interest on EPF contributions during the current financial year. The Board, however, decided not to invest five per cent of the EPF funds in the stock-market, a proposal made by the Finance Ministry. At the Board meeting on Saturday, Jan. 27, representatives of the trade unions said that the employees’ hard-earned money should not be put at risk.
Observers say that with the Board not agreeing to investment of part of the provident fund moneys in the stock markets, there may be no option, but to cut the interest rate which would be opposed by the trade unions and the Left parties.
In another related move, the Centre said on Jan. 22 that it will notify an interim investment pattern for funds collected under the new Pension Scheme that will allow putting in a part of the amount in stock markets. The new pattern would give an option for investing five per cent of the amount in the stock markets. Nineteen states supported the Centre’s stand at a meeting on Pension reforms with Chief Ministers in New Delhi on Jan. 22. The Prime Minister chaired the meeting.
The sharp differences between the Left-ruled states and the Centre, however, became evident yet again on the issue with West Bengal, Kerala and Tripura voicing vehement opposition to the proposed investment pattern for NPS. The Left is also opposed to Pension Fund Regulatory and Development Authority Bill, which has been hanging fire, even as the NDA-ruled states demanded expeditious passage of the Bill.
The investment pattern would be interim in nature till the passage of the Bill. The first fund manager would be from the public sector, Finance Minister Chidambaram said.
The UPA Government’s Left allies, whose support is crucial for passing the Bill, would, however, continue to be engaged. “We will continue to consult the political parties,” Chidambaram said adding, there was an emerging consensus that the Bill should be passed as early as possible, but “of course, with some amendments.”
The Central Government employees recruited since Jan. 1, 2004, are under the NPS which is based on a defined contribution system against defined benefit system.
No decision on SEZs at GoM meeting
A crucial meeting of the empowered Group of Ministers on Special Economic Zones (SEZs) in New Delhi on Jan. 22 remained inconclusive, reflecting conflicting opinions on the matter within the Congress and the UPA. There are reports that the Congress central leadership is faced with a dilemma on the SEZ issue - particularly on aspects like acquisition of land, impact on farmers and other vulnerable sections and the question of rehabilitation and resettlement of the displaced people as the GoM headed by External Affairs Minister Pranab Mukherjee could not take a final view on the matter. The fate of over 340 SEZs, which have been approved, but not notified, remains uncertain.
Meanwhile, the Tatas have started construction work at the Singur site in West Bengal for their small car plant. Trinamul Congress chief Mamata Banerjee has reacted angrily to the move. Banerjee who had got assurances from the President and the Prime Minister that the matter would be discussed before any further step was taken at Singur, was livid : “I felt deceived when I came across the news in the electronic media about the state Government’s and Tata Motors’ initiative to begin construction work even before holding talks with me,” she said in a handwritten press note. “It is a breach of trust by the Government.”
At the project site near Beraberi, a group of villagers reportedly backed by the Trinamul Congress set fire to the temporary fencing erected by the company as soon as construction began. Officials of the Commerce and Industry Department said the State Government would formally hand over the land - about 1000 acres - for the project to Tata Motors within a week or two.
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