Employee provident fund (EPF) is likely to see lower interest rates in 2018, as the Central government choose to keep this indicator unchanged.
According to Indian Express report, the government is working on keeping the interest rate on provident fund unchanged at last year’s level by dipping into shares held by the Employees Provident Fund Organisation (EPFO) for the extra 0.15% payout.
Citing sources, the report said the EPFO would sell shares worth Rs 2,000 crore to book an estimated extra income of Rs 850 crore due to the buoyancy in share prices on the back of a spurt in the bourses. This additional gain of Rs 850 crore would be ploughed in as total earnings to determine the PF rate.
The Central Board of Trustees of EPFO would reportedly be meeting next month for finalising the PF rate and the procedures of the share sale.
Currently, EPFO invests in equities through stock exchanges. So far, it has invested ETFs run by SBI Mutual Fund, UTI Mutual Fund and the central public sector enterprises ETF run by Reliance Mutual Fund.
During fiscal FY17, the EPFO lowered the interest rate on EPF deposits to 8.65%% from the previous 8.8% in FY16.
EPF is among the most beneficial and popular investment scheme organised by the government for the salaried people in India.
EPFO offers many online services through its portal for EPF members, and thereby, the services are delivered transparently, efficiently and comfortably to everyone.
Wage limit of these mandatory EPF has not been changed since September 2014 - where Rs 15,000 ceiling was decided from previous Rs 6,500 by the government.
Currently, the government pays 1.16% of the wages to each subscriber who are earning less than Rs 15,000 per month towards EPS. While employees contribute 12% of the basic pay towards EPF.
At the same time, employer contributes 8.33% towards EPS for pay up to Rs 15,000 and 3.67% of the pay to EPF. They also contribute 0.5% towards Employee Deposit Linked Insurance Scheme (EDLI), 0.65% as EPF administrative charges and 0.01% as EDLI handling fee.
Earlier Ministry of Labour and Employment during Public Accounts Committee 2015 - 16 report highlighted that revision of wages for mandatory coverage is a process, which involves tripartite consultation among Employer, Employee and the government, and it also involves concurrence of Ministry of Finance as it is a policy decision having budgetary impact.
With the contribution of 1.16% towards EPFO subscribers total basic wages, the government bears an annual burden to the tune of Rs 6,750 crore.
In November 2017, Union Minister of Labour & Employment Santosh Kumar Gangwar had approved a proposal for centralised payment system for EPFO using National Payments Corporation of India (NPCI) platform, which would not only reduce transaction charges but also bring more convenience.
By end of November, there were reports stating that EPFO may cut rate of return on provident fund deposits for 2017-18 due to lower income on bonds and its plan to credit ETF investments directly into the account of subscribers.
Also, the EPFO may be looking at raising the wage ceiling for mandatory coverage of formal sector workers to Rs 21,000 in 2018 from Rs 15,000 per month.
It may be noted that there are around 6 crore subscribers to the savings scheme.
TAGS:
EMPLOYEE PROVIDENT FUNDEPF INTEREST RATESEPFONDA GOVERNMENTPROVIDENT FUNDPF INTEREST RATEMINISTRY OF LABOUREPF PERFORMANCEECONOMYEPF INVESTMENT
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Modi leaves for Davos to attend World Economic Forum
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Modi leaves for Davos to attend World Economic Forum
On Tuesday, Modi will also interact with 120 members of the International Business Council, which is a part of the WEF. Image source: Reuters
By ZeeBiz WebTeam
Updated: Mon, Jan 22, 2018
10:49 am
ZeeBiz WebDesk
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Prime Minister Narendra Modi on Monday left for Davos in Switzerland to attend the World Economic Forum.
"Showcasing India`s resilient economy and India`s attractiveness as a destination of doing business!
"PM Narendra Modi emplanes for Davos to participate in the World Economic Forum," Ministry of External Affairs Spokesperson Raveesh Kumar said in a tweet.
Modi will be the first Prime Minister from India to participate in the forum meeting in two decades after the then Prime Minister H.D. Deve Gowda in 1997.
The main event in Davos will be the keynote speech of Modi at the plenary session on January 23.
On Tuesday, Modi will also interact with 120 members of the International Business Council, which is a part of the WEF.
After HD Deve Gowda, Modi will be the first Indian Prime Minister in the last two decades to be at the annual WEF meeting.
According to media reports, the private dinner at the Inter Continental is for 125 special invitees who will be briefed about the various government initiatives to liberalise foreign investments and replace "red tape with red carpet" that has already led to $80 billion of investment in process.
The new opportunities in healthcare, manufacturing, renewable energy, ecommerce, infrastructure and other areas will reportedly be in focus as will the strength of local human capital.
The ET report says that in attendance will be expat Indians like PepsiCo's Indra Nooyi and Microsoft's Satya Nadella as well as Ericsson CEO Borje Ekholm, Qualcomm's Paul Jacob, Thyssenkrupp's Heinrich Hiesinger, Hitachi's Hiroaki Nakanishi, Sultan Ahmed bin Sulayem of DP World, IBM's boss and WEF cochair Ginni Rommety and Alibaba's Jack Ma.
Others on the guest list reportedly include Anders Runevard of Swedish wind energy major Vestas, Jesper Brodin of IKEA, Carlyle PE's cofounder David Rubenstein as well as Larry Fink of Blackrock.
As per the report, chief executives and chairmen of Wall Street banks like Citi, Morgan Stanley, Bank of America Merrill Lynch along with Volvo, American Towers, trading giant Trafigura, Kuwait Investment Authority, and American Towers Corporation (ATC) will also enjoy the specially created traditional Indian thali meal designed by top Taj Group chefs.
Two themes will underscore the India initiative at Davos. The business and investment pitch will be largely in the bilateral meetings and the dinner while Modi's keynote address will be mostly on this year's central theme of creating a shared future amid fractured mandates and India's pivotal role both in the region and across the wider global stage, reports ET.
Finance minister Arun Jaitley is unlikely to travel to the World Economic Forum (WEF) annual meeting in Davos next week, preferring instead to put the finishing touches on the Union Budget due to be unveiled on February 1, reports Moneycontrol.
According to the report, Jaitley's decision to skip the marquee event in Switzerland underlines the importance the government attaches to this Budget, the last full one before general elections due next year.
From India, Bengaluru
2According to Indian Express report, the government is working on keeping the interest rate on provident fund unchanged at last year’s level by dipping into shares held by the Employees Provident Fund Organisation (EPFO) for the extra 0.15% payout.
Citing sources, the report said the EPFO would sell shares worth Rs 2,000 crore to book an estimated extra income of Rs 850 crore due to the buoyancy in share prices on the back of a spurt in the bourses. This additional gain of Rs 850 crore would be ploughed in as total earnings to determine the PF rate.
The Central Board of Trustees of EPFO would reportedly be meeting next month for finalising the PF rate and the procedures of the share sale.
Currently, EPFO invests in equities through stock exchanges. So far, it has invested ETFs run by SBI Mutual Fund, UTI Mutual Fund and the central public sector enterprises ETF run by Reliance Mutual Fund.
During fiscal FY17, the EPFO lowered the interest rate on EPF deposits to 8.65%% from the previous 8.8% in FY16.
EPF is among the most beneficial and popular investment scheme organised by the government for the salaried people in India.
EPFO offers many online services through its portal for EPF members, and thereby, the services are delivered transparently, efficiently and comfortably to everyone.
Wage limit of these mandatory EPF has not been changed since September 2014 - where Rs 15,000 ceiling was decided from previous Rs 6,500 by the government.
Currently, the government pays 1.16% of the wages to each subscriber who are earning less than Rs 15,000 per month towards EPS. While employees contribute 12% of the basic pay towards EPF.
At the same time, employer contributes 8.33% towards EPS for pay up to Rs 15,000 and 3.67% of the pay to EPF. They also contribute 0.5% towards Employee Deposit Linked Insurance Scheme (EDLI), 0.65% as EPF administrative charges and 0.01% as EDLI handling fee.
Earlier Ministry of Labour and Employment during Public Accounts Committee 2015 - 16 report highlighted that revision of wages for mandatory coverage is a process, which involves tripartite consultation among Employer, Employee and the government, and it also involves concurrence of Ministry of Finance as it is a policy decision having budgetary impact.
With the contribution of 1.16% towards EPFO subscribers total basic wages, the government bears an annual burden to the tune of Rs 6,750 crore.
In November 2017, Union Minister of Labour & Employment Santosh Kumar Gangwar had approved a proposal for centralised payment system for EPFO using National Payments Corporation of India (NPCI) platform, which would not only reduce transaction charges but also bring more convenience.
By end of November, there were reports stating that EPFO may cut rate of return on provident fund deposits for 2017-18 due to lower income on bonds and its plan to credit ETF investments directly into the account of subscribers.
Also, the EPFO may be looking at raising the wage ceiling for mandatory coverage of formal sector workers to Rs 21,000 in 2018 from Rs 15,000 per month.
It may be noted that there are around 6 crore subscribers to the savings scheme.
TAGS:
EMPLOYEE PROVIDENT FUNDEPF INTEREST RATESEPFONDA GOVERNMENTPROVIDENT FUNDPF INTEREST RATEMINISTRY OF LABOUREPF PERFORMANCEECONOMYEPF INVESTMENT
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NEXT STORY: Modi leaves for Davos to attend World Economic Forum
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NEXT STORY
Home » India News
Modi leaves for Davos to attend World Economic Forum
Twitter Facebook GPlus
Modi leaves for Davos to attend World Economic Forum
On Tuesday, Modi will also interact with 120 members of the International Business Council, which is a part of the WEF. Image source: Reuters
By ZeeBiz WebTeam
Updated: Mon, Jan 22, 2018
10:49 am
ZeeBiz WebDesk
RELATED NEWS
Modi stoutly defends his economic policy, says note ban a huge success Modi stoutly defends his economic policy, says note ban a huge success
India joins another export control group, bolsters NSG claim India joins another export control group, bolsters NSG claim
Budget 2018: Realty sector has long-list of demand from FM Budget 2018: Realty sector has long-list of demand from FM
LTCG on equities: Will it make a comeback in Budget 2018? LTCG on equities: Will it make a comeback in Budget 2018?
India reclaiming place at growth leader, says IMF India reclaiming place at growth leader, says IMF
Prime Minister Narendra Modi on Monday left for Davos in Switzerland to attend the World Economic Forum.
"Showcasing India`s resilient economy and India`s attractiveness as a destination of doing business!
"PM Narendra Modi emplanes for Davos to participate in the World Economic Forum," Ministry of External Affairs Spokesperson Raveesh Kumar said in a tweet.
Modi will be the first Prime Minister from India to participate in the forum meeting in two decades after the then Prime Minister H.D. Deve Gowda in 1997.
The main event in Davos will be the keynote speech of Modi at the plenary session on January 23.
On Tuesday, Modi will also interact with 120 members of the International Business Council, which is a part of the WEF.
After HD Deve Gowda, Modi will be the first Indian Prime Minister in the last two decades to be at the annual WEF meeting.
According to media reports, the private dinner at the Inter Continental is for 125 special invitees who will be briefed about the various government initiatives to liberalise foreign investments and replace "red tape with red carpet" that has already led to $80 billion of investment in process.
The new opportunities in healthcare, manufacturing, renewable energy, ecommerce, infrastructure and other areas will reportedly be in focus as will the strength of local human capital.
The ET report says that in attendance will be expat Indians like PepsiCo's Indra Nooyi and Microsoft's Satya Nadella as well as Ericsson CEO Borje Ekholm, Qualcomm's Paul Jacob, Thyssenkrupp's Heinrich Hiesinger, Hitachi's Hiroaki Nakanishi, Sultan Ahmed bin Sulayem of DP World, IBM's boss and WEF cochair Ginni Rommety and Alibaba's Jack Ma.
Others on the guest list reportedly include Anders Runevard of Swedish wind energy major Vestas, Jesper Brodin of IKEA, Carlyle PE's cofounder David Rubenstein as well as Larry Fink of Blackrock.
As per the report, chief executives and chairmen of Wall Street banks like Citi, Morgan Stanley, Bank of America Merrill Lynch along with Volvo, American Towers, trading giant Trafigura, Kuwait Investment Authority, and American Towers Corporation (ATC) will also enjoy the specially created traditional Indian thali meal designed by top Taj Group chefs.
Two themes will underscore the India initiative at Davos. The business and investment pitch will be largely in the bilateral meetings and the dinner while Modi's keynote address will be mostly on this year's central theme of creating a shared future amid fractured mandates and India's pivotal role both in the region and across the wider global stage, reports ET.
Finance minister Arun Jaitley is unlikely to travel to the World Economic Forum (WEF) annual meeting in Davos next week, preferring instead to put the finishing touches on the Union Budget due to be unveiled on February 1, reports Moneycontrol.
According to the report, Jaitley's decision to skip the marquee event in Switzerland underlines the importance the government attaches to this Budget, the last full one before general elections due next year.
From India, Bengaluru
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EMPLOYEES' PROVIDENT FUND & MISC PROVISIONS ACT '1952.ppt
EMPLOYEES' PROVIDENT FUND & MISC PROVISIONS ACT '1952 [Compatibility Mode].pdf