Central Govt notifies Non-Government Provident, Superannuation and Gratuity Fund Interest Rates

The Central Government has notified that the deposits made under the Special Deposit Scheme for Non-Government Provident, Superannuation and Gratuity Funds, shall with effect from 1st April, 2023 to 30th June, 2023 (Q2, 2023) bear interest at 7.1% (Seven point one percent).

This rate will be in force w.e.f. 1st April, 2023.

The funds concerned are: –

1. The General Provident Fund (Central Services).
2. The Contributory Provident Fund (India).
3. The All India Services Provident Fund.
4. The State Railway Provident Fund.
5. The General Provident Fund (Defence Services).
6. The Indian Ordnance Department Provident Fund.
7. The Indian Ordnance Factories Workmen’s Provident Fund.
8. The Indian Naval Dockyard Workmen’s Provident Fund.
9. The Defence Services Officers Provident Fund.
10. The Armed Forces Personnel Provident Fund.

For proper implementation of the same, copies of the decision to revise the interest rates were also forwarded to –

1. Comptroller & Auditor General of India and all offices under his control.
2. Chairman, Pension Fund Regulatory and Development Authority.
3. Controller General of Accounts (10 copies).
4. Ministry of Personnel Public Grievances and Pension (Pension Unit/All India Services Division).
5. Financial Adviser of Ministries/Departments (6 copies).
6. Chief Controller of Accounts/Controller of Accounts of Ministries/Departments.
7. Controller General of Defence Accounts.
8. Finance Secretary of all State Governments and Union Territories.
9. Secretary to Governors/Lt. Governors of all States/Union Territories.
10. Secretary Staff Side, National Council of JCM.
11. All Members, Staff Side, National Council of JCM.
12. NIC – For uploading on web host.

An increase in deposit interest rate can have both positive and negative effects on an economy, depending on the overall economic conditions and other factors at play.

Here are a few ways in which an increase in deposit interest rate may affect an economy:

Increased savings: When deposit interest rates increase, it becomes more attractive for people to save their money rather than spend it. This can lead to an increase in overall savings in the economy, which can provide more funds for investment and future economic growth.

Decreased consumer spending: On the other hand, higher deposit interest rates may also discourage consumer spending as people may choose to save their money rather than spend it. This can lead to a decrease in overall economic activity, which may have a negative impact on businesses and employment.

Increased borrowing costs: Higher deposit interest rates can also lead to increased borrowing costs for businesses and individuals, as banks may raise their lending rates to maintain their profitability. This can lead to a decrease in investment and economic growth, as borrowing becomes more expensive.

Exchange rate effects: An increase in deposit interest rates can also affect the exchange rate of a country’s currency. Higher interest rates can make the currency more attractive to foreign investors, leading to an appreciation of the currency. This can make exports more expensive and imports cheaper, potentially affecting a country’s trade balance.

Overall, the impact of an increase in deposit interest rates on an economy will depend on a variety of factors, including the current economic conditions, the level of inflation, and the strength of other economic indicators.

However, the PF interest rates have been pretty consistently fixed at 7.1% p.a.  since the last few quarters.

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