India, June 20 -- The Union finance ministry has asked the labour ministry to review the 8.65% rate of interest proposed on the employees' provident fund (EPF) deposits for the 2018-19 fiscal, according to two officials aware of the development who said the suggestion could lead to a 0.5-1 percentage point cut when the rate is finally notified.

The EPF interest rate was at a five-year low of 8.55% in the 2017-18 fiscal, and the 8.65% proposal, made in the run-up to the general elections in February, would have benefited the roughly 45 million subscribers to the retirement savings account. No notification has yet been issued.

The finance ministry objected to the proposal, citing investments in the troubled IL&FS group companies as one of...