Big news for middle class people.The government is showing some love to the middle class right now. First off, the Finance Minister announced that income up to Rs 12 lakh is tax-free in the budget. Then, after a long five-year wait, the Reserve Bank made it easier to get affordable loans by cutting the repo rate. Now, there are talks of another big announcement on the horizon, with rumors suggesting that the government might boost the interest rates for the Provident Fund (PF) for workers.
Mark your calendars for the 28th!
There’s a meeting of the Central Board of Trustees for the Employees’ Provident Fund Organization (EPFO) set for February 28, led by the Union Labor Minister. Representatives from both employer groups and trade unions will be there. It’s expected that they might decide on increasing the PF interest rates during this meeting, although the official agenda hasn’t been shared yet.
So, why the buzz?
Media reports indicate that the interest rate for this financial year is still up in the air, so they might come to an agreement during the meeting. Last year, EPFO set the PF interest rate at 8.25% for 2023-24, which was a bump from 8.15% in 2022-23. This raises hopes that they might offer even more relief to workers by hiking the interest rates again.
The government is prioritizing the boost in consumption to provide a much-needed lift to the economy. In the latest budget, an income of Rs 12 lakh has been exempted from taxes to encourage this initiative. The idea is that when individuals have a bit more disposable income, they are likely to spend it, thereby enhancing consumption and aiding economic growth.
Following this budget relief, the Reserve Bank has also taken steps to benefit the public by lowering the repo rate. This move by the RBI will make loans more affordable and ease the pressure of EMIs.