New Delhi: Left parties today (Aug 9, 2004) came down heavily on the UPA (United Progressive Alliance) Government, terming its decision to slash provident fund rate by one per cent as "unfortunate" and saying the move would not serve the people's interests, especially those of the pensioners.

They also extended support to the Trade Unions in their proposed September 20 agitation to demand a hike in the interest rate to 12 per cent.

"The existing interest regime is loaded heavily against the depositors. As much as 78 per cent of total accruals from the EPF (Employees Provident Fund) has to be invested in Government securities.

Now, with Government saying that the interest would be driven by the market, it clearly means that it is loaded in favour of the corporates," CPM (Communist Party of India-Marxist) leader Nilotpal Basu told reporters.

Describing the decision of the Central Board of Trustees as "unfortunate", he said with lower interest, the return on borrowings are going down at a fast pace. Coupled with this, the rise in inflation rate actually converts the returns on deposits into a negative rate".

Criticising the decision, CPI National Secretary D Raja said the Government should have held talks with the Trade Unions on the issue and need not have gone ahead with announcing a decision on the matter.

"It is the only source of income for lakhs of pensioners in the absence of a social security net," Raja said.

The Left-affiliated Trade Unions did not agree with the rate cut during the Trustees' meeting and are firming up plans to stage demonstrations later this month.