By Pramod Kumar
?The UPA government will never take decisions on the EPF without consultations with and approval of the EPF Board.? This is the commitment made in the Common Minimum Programme (CMP) by the United Progressive Alliance (UPA). But now, completely ignoring the EPF Board and taking a unilateral decision, the UPA government has forced the Board to reduce the rate of interest on EPF from 9.5 per cent to 8.5 per cent. Although, there is no provision for taking an ?interim decision? in the EPF Act, the government by declaring this reduction ?interim? has made its intention clear that the interest rate may further be reduced.
Surprisingly, INTUC, the Congress-affiliated Labour Union, which claims itself to be the only protector of labourers´ interests, has welcomed the decision. The Left unions are in a state of utter confusion, not knowing whether to forcefully oppose or support this anti-labour decision.
Before the meeting of the EPF Board, the Bharatiya Mazdoor Sangh (BMS) representatives submitted a proposal to the Board saying that not to speak of the existing 9.5 per cent rate of interest, the Board could pay even 12 per cent interest to the contributors and even after paying this much amount of interest, the Board could save Rs 333 crore as surplus. ?The EPF Board received a total of Rs 8,981 crore as interest during 2003-2004. After deducting 12 per cent interest (Rs 8,648 crore), if paid to the contributors, the Board saves Rs 333 crore (8,981 crore minus 8,648 crore = Rs 333 crore) as surplus amount. It proves that the Board can easily pay 12 per cent interest to the contributors,? claimed Hasubhai Dave, the BMS president who is also member of the Provident Fund Central Board of Trustees.
He said the BMS had submitted this calculation to the EPF Board chairman on August 9, 2004, before the Board meeting began. Since this calculation was based on statistics provided by the Board itself, the Board could not claim it to be wrong. But the Board neither declared it wrong nor accepted it, since the Labour Minister, who is also chairman of the Board, appeared to have come with his mind made up to reduce the rate of interest.
The main reason put forward by the Board for reduction of the rate of interest is that it now receives lesser interest (8 per cent) on the money invested by it under the Special Deposit Scheme (SDS). It is to be mentioned here that the 45 per cent of the total money collected by the Board is transferred to the investment account and 55 per cent is kept for settlement and advances. In investment account too 80 per cent of the total invested money has to be compulsorily invested under SDS. The major portion of the funds available with the Provident Fund is utilised by the government as part of its budgetary resources.
When the Board finally declared 8.5 per cent interest on EPF, the INTUC representative, Ashok Kumar, argued with the Board that if it had decided to bear the deficit of Rs 206 crore by giving half per cent more interest of what it received from investment, then why didn'tit continue with the existing 9.5 per cent bearing more deficit? He also argued that if the calculations provided by the BMS pertaining to 12 per cent interest were wrong, the Board should have explicitly stated so. And if their calculations were correct, why didn'tthe Board accept them and declare 12 per cent interest?
The EPF Board claims that it will have to face a deficit of Rs 206 crore if it pays 8.5 per cent interest, while the labour unions claim that there would be no deficit and the Board would have a surplus amount even after it pays 12 per cent interest. Then where is the confusion? ?The confusion lies in the calculation of interest. Keeping in view the growing inflation, which is at 7.5 now, the rate of interest should be increased and it should be calculated at the end of the year. Now the Board takes all such decisions on expectations in the beginning of the year, which do not match with the actual results received at the end of the year. See the results of the year 2001-2002 when the Board received Rs 504 crore surplus as interest. Similarly, during 2002-2003 it received Rs 204 crore more as interest than its expectations. During 2003-2004 too it received Rs 154 crore as surplus interest. We feel if calculations are done at the end of the year, the results would be different,? said Shri Dave.
The government'sintention appears unfair to the labourers. It gives 8 per cent interest to EPF Board on investment in SDS, while it pays 9 per cent interest to senior citizens under the same SDS scheme, which was exclusively started for PF investment only. If the government gives 9 per cent interest on PF investment, then over 3.5 crore contributors would benefit.
Shri Dave demanded that the Left parties should withdraw their support from the anti-people and anti-workers policies of the government. ?Though, several Left parties are raising hue and cry over this decision, they do not corner the government on this issue. That is why we have decided to organise a protest rally in Delhi on September 20,? he informed and advised the four representatives of the Left-associated labour unions?CITU, AITUC, HMS and UTUC (LS)?to resign from the Central Board of Trustees.