She said Sukanya Samriddhi Yojana offers 7.6% interest, Senior Citizen Saving Scheme 7.4%, Public Provident Fund 7.1% and State Bank of India’s 5-10 year fixed deposits 5.5%.
Defending the decision of the Central Board of Trustees (CBT), the highest decision-making body of the Employees’ Provident Fund Organization (EPFO), to cut interest rates on PF deposits for 2021-22 to a four-decade low of 8 .1%, Finance Minister Nirmala Sitharaman said Monday the rate reflected current market realities, adding that it was still higher compared to rates offered under other fixed-income schemes.
Speaking of the approval being sought for additional spending for 2021-22, she said the government has been bearing higher fertilizer costs through increased subsidies rather than passing it on to farmers.
Noting that the Center is rapidly transferring funds to states, the minister said the revised estimate of Rs 7.45 lakh crore devolution of the state’s share of central taxes for the current fiscal year has already been released.
Comparing the EPFO rate to other schemes, she said Sukanya Samriddhi Yojana offers 7.6% interest, Senior Citizen Saving Scheme 7.4%, Public Provident Fund 7.1% and the 5-10 year fixed deposits of the State Bank of India 5.5%. The average yield for central government securities over specified maturities is 6.28%, she said.
“It hasn’t been knocked down in 40 years. There are today’s realities that keep us in the context of decisions made by the EPFO central council,” Sitharaman said in her response to a discussion of credit accounts in the Rajya Sabha.
On March 12, the EPFO’s central board of directors decided to cut the interest on PF deposits for 2021-22 for its subscribers from nearly 6.5 crore. This is the lowest EPF rate statement since 1977-78 when it stood at 8%. The 2021-22 PF rate will be operationalized after the Treasury Department approves it.
Responding to questions about LIC’s pre-IPO valuation, the minister said the state-run insurer’s embedded value (EV) has been calculated in an “extremely scientific manner” and disclosed in draft IPO documents released. have been submitted to SEBI. The EV is pegged at Rs 5.4 lakh crore.
This post EPF Percentage Reflects Market Reality: FM Nirmala Sitharaman was original published at “https://www.financialexpress.com/economy/epf-rate-reflects-market-realities-fm-nirmala-sitharaman/2467245/”