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March 24, 2012 | NEWS | Post by: admin
Interest Rate on GPF(General Provident Fund) has been increased to 8.6 % wef 01.12.2011.Earlier Interest on other Govt investment scheme like PPF ,NSC has also been Increased from similar date.
For the first time since 2003, the finance ministry has hiked the interest rate on government employees’ retirement savings parked in the General Provident Fund (GPF) from 8% to 8.6%.
A similar rate hike has also been effected in a special deposit scheme (SDS) where nongovernment retirement funds have invested over Rs1,10,000 crore. This could boost the Employees’ Provident Fund (EPF) rate next year, which was slashed last week from 9.5% to 8.25% for 2011-12.
(PUBLISHED IN PART I SECTION 1 OF GAZETTE OF INDIA)
Government of India
Ministry of Finance
(Department of Economic Affairs)
New Delhi, the 19th March, 2012
It is announced for general information that during the year 2011-2012, accumulations at the credit of subscribers to the GeneralProvident Fund and other similar funds shall carry interest at the rate of 8% (Eight per cent) for the period from 1.4.2011 to 30.11.2011 and 8.6% (eight point six percent) with effect from 1.12.2011. The funds concerned are:—
1. The General Provident Fund (Central Services).
2. The Contributory Provident Fund (India).
3. The All India Services Provident Fund.
4. The State Railway Provident Fund.
5. The General Provident Fund (Defence Services).
6. The Indian Ordnance Department Provident Fund.
7. The Indian Ordnance Factories Workmen’s Provident Fund.
8. The Indian Naval Dockyard Workmen’s Provident Fund.
9. The Defence Services Officers Provident Fund.
10. The Armed Forces Personnel Provident Fund.
2. Ordered that the Resolution be published in Gazette of India.
Deputy Secretary (Budget)
Around 1.5 crore government employees invest part of their salary into the General Provident Fund (GPF). The finance ministry notified the increased SDS interest rate on March 13 and the hike in the GPF rate on March 19.
Apart from the EPF, other major investors in the SDS are the Seamen’s Provident Fund, Coal Miners’ PF and other non-government superannuation pension and gratuity funds. These funds provide a social security net to around 6.5 crore organised sector employees and were mandatorily required to invest in the SDS from 1975 to 1997.
Both the interest rate hikes are effective from December 1, 2011 – the same day that returns on the Public Provident Fund and National Savings Certificates (NSCs) were raised to 8.6% and 8.7%, respectively. Traditionally, the interest rate on the GPF, the SDS and the PPF rate, have moved in tandem.
In November, the government had announced a hike in the return on PPF and NSCs. Tapan Sen, Rajya Sabha member from the Communist Party of India (Marxist), told ET that the rate hike has come too late. While the GPF interest is credited on March 31, the interest on SDS investments is paid out on January 1.