New Delhi : The Government has slashed interest rate on deposits in Employees Provident Fund, EPF, from 9.5 per cent to 8.25 per cent for 2011-12, affecting over 4.7 crore subscribers.

The official sources said in New Delhi yesterday that this cut was proposed by the Finance Ministry and a notification was issued by the Labour Ministry.

The Employees’ Provident Fund Organisation, EPFO, had provided 9.5 per cent interest rate to its subscribers for 2010-11 after it found 1,731 crore rupees surplus in its books of account.

The Labour Ministry had recommended 8.6 per cent rate of interest for this fiscal.

According to EPFO’s income projections, a provision of 8.25 per cent interest for 2011-12 would still leave a deficit of 24 lakh rupees.

The government’s decision came under criticism with Hind Mazadoor Sabha Secretary, A D Nagpal who is also an EPFO trustee, saying it was unfair.

In December, EPFO’s trustees had failed to decide on the interest rate for the current fiscal following sharp differences among them on the issue and had sought the Finance Ministry’s intervention.