Sitharaman defends EPFO interest rate

New Delhi: Finance minister Nirmala Sitharaman on Monday defended a proposal to cut interest rate paid on employees’ provident fund deposits to over four-decade low of 8.1 per cent, saying the rate is dictated by today’s realities where interest rate on other small saving instruments was even lower.

Replying to a debate in the Rajya Sabha on the supplementary spending for the current fiscal, she said the decision to lower rate was taken by the central board of the provident fund managing body EPFO, which has representatives of all stakeholders, including trade unions. On excess spending approval being sought, she said that the government has borne higher cost of urea, and not passed it on to farmers.