Indian rupee vs dollar
Indian rupee vs dollarReuters file

Salaried individuals across India had a little more to cheer for as the central government on Friday hiked the interest rate on on provident fund (PF) deposits to 8.8 percent for the financial year 2016-17, said reports. This is the third time the government has made a u-turn on rules pertaining to PF over the course of the past two months.

Just last week, the government proposed 8.7 percent interest on PF deposits for the financial year 2015-2016, lower than 8.8 percent suggested by the Employees' Provident Fund Organisation (EPFO).

"I am happy that finance ministry has agreed to 8.8 percent for 2015-16," Labour Minister Bandaru Dattatreya was quoted by the Times of India as saying in a report. The minister had earlier assured the BJP-affiliated trade union Bharatiya Mazdoor Sangh that he was trying to get the finance ministry to agree to the 8.8 percent interest rate, according to an India Today report.

The government's move is reportedly in response to pressure from labour unions, who wanted the interest rate on PF to be 8.95 percent.

Trade unions, which constantly demanded higher interest rates for PF deposits, saw the government's move on Friday as a victory of sorts, according to an Indo-Asian News Service report.

"The protest was successful with workers across the country participating in it," IANS quoted AK Padmanabhan, president of the Left-aligned Centre of Indian Trade Union, as saying.

The interest rate was 8.75 percent in the previous fiscal for over five crore subscribers to the EPFO.