Letters: The power to dispose

With reference to the report, "Labour asks finance ministry to hike EPF rate to 8.8%" (April 28), the prevailing difference of opinion between the finance ministry and the labour ministry over the interest rate on the Employees' Provident Fund (EPF) is a pointer to the "inside" story about the Narendra Modi-led government.

While the finance ministry maintains it has only "advised" the labour ministry to lower the interest rate to 8.7 per cent, the Bandaru Dattatreya-led labour ministry says it was a "directive".

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There are some wide variations, too, in the estimation of the resultant surplus that will accrue to the Central Board of Trustees (CBT) on the interest rate of 8.8 per cent for EPF and the finance ministry-approved rate of 8.7 per cent. The finance ministry says the interest rate of 8.7 per cent would yield a surplus of around Rs 1,000 crore but the Employees' Provident Fund Organisation calculates it to be around Rs 863 crore. Alternatively, if the rate of interest is fixed at 8.8 per cent, the relevant surplus would be around Rs 673 crore and Rs 863 crore respectively.

Dattatreya, in a written reply to the Lok Sabha on Monday, said the finance ministry ratified an interest rate of 8.7 per cent against the CBT-recommended rate of 8.8 per cent. This apart, a labour ministry official said the finance ministry always ratified the rates recommended by the CBT.

Central trade unions are unhappy with the finance ministry's decision and accused it of disrespecting the CBT, the supreme decision-making body of the EPFO. The unions have given a call for a day-long nationwide protest on Friday.

Some media reports indicated that Finance Minister Arun Jaitley had defended his stance of approving a lower PF interest rate, albeit in an advisory capacity, to battle fund crunch. There is no likelihood of any reversal in his stand. So the fact remains that irrespective of who proposes, it is the finance minister who disposes.

Vinayak G, Bengaluru

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