EPF interest rate witnessed a raise from 8.55% for FY 2017-18 to 8.65% for the FY 2018-19, post the proposal being approved by the Ministry of Finance.
- EPF limit has been substantially increased from Rs. 6,500 to Rs. 15,000
- Provision for pension, starting from a minimum of Rs, 1,000
- Administration charges was reduced from 1.10% to 0.85%
Initially, there were talks of the EPF limit being raised from Rs. 6,500 to Rs. 10,000 in the first phase, and then further increase it to Rs. 15,000 later. The reason behind this was to control the sudden sharp rise in the EPF limit. One of the reasons cited for the resistance is that the sudden rise in EPF limits and the provision for pension is a labour and time-intensive initiative. It also requires improvement in infrastructure that is cost-intensive.
There were also some reservations expressed by Micro, Small and Medium Establishments (MSMEs) as they were of the opinion that such a move would adversely affect their business. However, the decision to introduce a pension of Rs. 1,000 was well accepted by all.
