| The meeting of the Central Board of Trustees (CBT) of the Employees Provident Fund Organisation (EPFO) on Tuesday, to settle the issue of deciding on the applicable rate of interest on deposits in the Fund for 2004-05, is again expected to end inconclusively.
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| The CBT is however seen to be veering towards accepting an 8 per cent rate of interest, according to top level government sources. They said the issue has got linked with the other demands made by Left parties for a roll back of a hike in foreign direct investment (FDI) limits in insurance, telecommunications and civil aviation.
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| In such an eventuality, as a trade off, the Left may concede a reduction of the rates. A request by the Left parties supported trade union members of the CBT, to meet Prime Minister Manmohan Singh before the meeting, to extract an assurance from the United Progressive Alliance (UPA) government has not come through. However the Prime Minister has met senior Left party leaders over the weekend to defuse the crisis.
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| CBT sources said the trade unions may ask for a third postponement of a decision on the issue, within the past twenty days to give time for a compromise formula to be worked out.
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| The government has said that it would not budge on allowing any rate above 8 per cent, in line with the rates on other small savings instruments.
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| The unions have asked the government to provide an explicit subsidy to the EPFO for the latter to retain at least a 9 per cent rate of interest on deposits.
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| As per the calculations of the Finance and Investment Committee of the EPFO, a 9 per cent rate would entail a subsidy of about Rs 655 crore for the Centre. Till last fiscal, the Organisation has paid a 9 per cent rate plus a 0.5 per cent golden jubilee bonus to all depositors. |
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