The EPF Board on Saturday failed to clinch the contentious issue of interest rate for the current fiscal for its 4 crore (40 million) subscribers and rejected finance ministry's proposal to invest 5 per cent of the EPF money in the equity market.

"Though the rate of interest was on top of today's agenda, a decision on it was postponed till the next meeting," Labour Minister Oscar Fernandes said.

Fernandes, who is the ex-officio Chairman of the Central Board of Trustees (CBT) of the EPF, said the next meeting of the Board was likely by the end of February.

Before the next meeting, he would try to have a fresh round of talks with the finance minister over the issue, the minister said.

"The rate of interest will depend on how much money we have in our coffers," he said.

On the finance ministry's proposal for investing 0.5 per cent of the EPF money in equity market, Fernandes said the Board has decided not to invest in the stock market.

While discussing the revised investment guidelines and revised investment pattern, the meeting spurned the finance ministry's proposal for investing a part of the fund in stock market.

Leftist trade unions fear that crash in stock market would ruin the hard-earned money of the EPF subscribers and that was one major reason for them to oppose the finance ministry's proposal.

The government had cut the rate to 8.5 per cent for 2005-06 from 9.5 per cent in 2004-05 as investment in government-run Special Deposit Scheme (SDS), which gave only eight per cent interest, did not suffice.

Secretary of AITUC, affiliated to CPI, D L Sachdeva told reporters that the central trade unions demanded that a meeting should be organised with Prime Minister Manmohan Singh on the crucial issue.

He said the deadlock persisted because the EPFO kept harping on its stand that it was cash-starved while the employees' representatives were of the firm view that there was enough money.

At the present rate of 8.5 per cent, EPFO will have a Rs 450 crore (Rs 4.50 billion) deficit and a reduction by half a per cent will leave it with a marginal surplus of Rs 10.25 crore (Rs 102.5 million).

At the last meeting of the EPF Central Board of Trustees, trade union leaders, including those of Congress-affiliated INTUC, wanted the labour minister to see if the government could raise interest rates on Special Deposit Schemes from the current 8 per cent or give some kind of financial support to the board to raise the EPF rates.