The Employees’ Provident Fund Organisation lowered the interest rate from 8.65% to a seven-year low of 8.50% per annum on its deposits for the year 2019-’20, Minister of State for Labour Santosh Gangwar said on Thursday.

Gangwar said the EPFO will have a surplus of over Rs 700 crore with the 8.5% interest rate for the ongoing fiscal year.

This interest rate is the lowest since 2012-’13, when it was also 8.5%. “The EPFO would have left with a surplus of over Rs 300 crore if it had provided 8.55% rate of interest on EPF for this fiscal,” an unidentified government official told PTI. “There would have been a deficit if the EPFO had provided a rate of more than 8.55% for current fiscal.”

The decision was made by the organisation’s central board of trustees, its highest decision-making body. After the board’s approval, a proposal is sent to the finance ministry to avoid any liability on account of shortfall in the provident fund income for a fiscal. The finance ministry has reportedly been urging the labour ministry to align the EPF interest rate with other small saving government schemes such as the public provident fund.

For the financial years 2013-’14 and 2014-’15, the EPFO had provided interests at the rate of 8.75%. This increased to 8.8% in 2015-’16 but then was reduced to 8.55% in the 2017-’18 period. The interest rate for 2018-’19 was 8.65%.

The retirement fund body has more than five crore subscribers.