Government makes a u-turn on EPF, agrees to 8.8 percent interest rate
New Delhi : In a major climbdown after persistent pressure from the trade unions and political parties, the government on Friday increased interest rate on employees provident fund (EPF) deposits to 8.8 percent for 2015-16 from 8.70 percent as it had announced earlier.
 
"I am happy to tell you that the EPF rate has been increased to 8.8 percent," Labour Minister Bandaru Dattatreya told reporters here.
 
The provident fund rate was 8.75 percent in 2014-15 and the Central Board of Trustees (CBT) had recommended to make it 8.8 percent for this fiscal. However, the finance ministry had rejected the recommendation and had approved only 8.70 percent interest, citing lower earnings.
 
Most trade unions had protested the decision and the issue was also raised by political parties both in parliament and outside. Trade unionist and Communist Party of India-Marxist MP Tapan Kumar Sen had also raised it in the Rajya Sabha.
 
Trade unions had threatened to intensify agitation from September if the government did not comply with the demand of higher EPF interest rates.
 
"This protest from all central trade unions is to condemn such arrogant, anti-worker approach of the central government," said a statement by All India Trade Union Congress (AITUC).
 
This is not the first u-turn the government has made in regard to the EPF.
 
On April 19, close on the heels of violent agitation in Bengaluru and also demand from trade unions, including from RSS-affiliated Bharatiya Mazdoor Sangh (BMS), the government had withdrawn its new rules of provident fund withdrawal.
 
According to the new norms proposed earlier this year, subscribers are not to be allowed to claim withdrawal of PF after attaining 54 years of age, and would have to wait till 57.
 
The earlier norms allowed contributors or subscribers to claim 90 percent of their accumulations in their PF account at the age of 54 years, and the final claims to be settled just one year before their retirement.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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DRT pulls up Diageo for delaying Mallya severance package details
Bengaluru : The Debt Recovery Tribunal (DRT) on Friday questioned liquor major Diageo for not yet submitting the specifics of $75 million severance package committed to embattled businessman Vijay Mallya.
 
"In my earlier ruling as well, I had directed the company (Diageo) to furnish the details of the severance package. Why it has not been placed before this court yet?" said DRT presiding officer C. R. Benakanahalli.
 
Benakanahalli directed Diageo to furnish the details of the severance package agreed with Mallya by May 12 in the hearing on applications filed by State Bank of India (SBI)-led bankers' consortium.
 
The SBI applied for first right on securing the $75 million severance package Mallya received on relinquishing the chairman's role at Diageo-owned United Spirits Limited (USL).
 
However, Benakanahalli overruled the bankers' demand to look into the case on a daily basis but promised to take it up on a priority basis. He posted the next hearing for June 2.
 
"As per the Supreme Court's direction, I have to complete the court proceedings into the matter in two months from the date of commencement of the hearing, so I will take the matter up on priority basis, not on daily basis, as I have many other cases pending before me, which also need timely disposal," he said.
 
Mallya's Kingfisher Airlines, grounded four years ago, owes more than Rs.9,000 crore to 17 banks.
 
Meanwhile, in an interview to Financial Times, Mallya said the charges against him are "preposterous" and that he was in "forced exile".
 
Mallya left for England on March 2, days before the bank consortium moved the Supreme Court to restrain him from leaving India.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Corruption, uncertain policies remain key concerns on India: Moody's
Corruption, policy uncertainties and slow implementation have constrained our assessment of India's institutional strength
 
New Delhi : Fiscal consolidation and moderate inflation are definite pluses for India, but graft, uncertain policies and their weak execution remain key constraints, according to Moody's Investors Service.
 
In an e-mail interview with IANS, Marie Diron, senior vice president for the Sovereign Risk Group, said the agency's assessment of India is based on its own evaluation, as also that of the World Bank on government's effectiveness, rule of law and inflation control. This is what she said:
 
"India's score are in the moderate range, reflecting checks and balances between the executive, legislature and judiciary, and increasing fiscal and monetary policy transparency," she said.
 
"However, corruption, policy uncertainties and slow implementation have constrained our assessment of India's institutional strength."
 
Moody's also expected fiscal consolidation to be gradual -- as a result of specific measures on which a consensus can be reached, rather than broad-ranging fiscal strategies. So high levels of government debt, at around 65 percent of GDP, will continue to be a constraint on India's rating.
 
"Besides the implications of fiscal policy for the government debt burden, the broad macroeconomic policy context has become more favourable to sustain growth. The government's repeated commitment to fiscal consolidation contributes to maintaining inflation at moderate level."
 
On the external sector, Diron said the impact on India of China's rebalancing, the general and economic developments there will be mainly indirect. This because the share of India's exports to China is much lower -- around 3.7 percent -- than for some other economies in the region.
 
"As a result, India would be affected by a slowdown in Chinese demand mainly to the extent that the global economy would be affected. Moreover, if such a slowdown were to lead to renewed falls in commodity prices, India as an importer of commodities would benefit," Diron said.
 
"Further, China's rebalancing may contribute to global volatility in capital flows. However, with narrower current account deficit financed by foreign direct investment, India is less vulnerable to a shift in investor sentiment and global capital flows than it would have been few years ago."
 
Diron's assessment comes against the backdrop of the caution by Moody's Investors Service that a prolonged worsening in asset quality of state-run banks was the main threat to India's sovereign credit profile, while suggesting that the government must recapitalise them with more money.
 
Moody's, which has given for India a credit rating at 'Baa3' -- or just a level above the junk category -- had said on Wednesday that it would consider a rating upgrade after 12-18 months, depending on improvement in macroeconomic parameters in India.
 
Nonetheless, its outlook on the country remained positive.
 
"Our positive outlook on India's rating is based on our expectations of continued but gradual policy efforts to reduce the sovereign risks posed by high fiscal deficits, volatile inflation and weak bank balance sheets."
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Jyoti Dua

1 year ago

Graft stands out in as a major constraint in our progress. Govt needs to take up policies to curb graft at all level. In this area, the action at State level is almost absent.

D S Ranga Rao

1 year ago

Is it a testimonial for the Modi government that it is no different from its predecessor in so far as corruption and policy paralysis are concerned? Up to the government to pause and ponder over.

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