The Finance Ministry has allowed private provident funds to invest a minimum of 5 per cent and a maximum of 15 per cent in equity and equity related schemes.
The market value of investments of Rs 5,920 crore (Rs 59.20 billion) in the ETFs in the current fiscal was Rs 5,355 crore (Rs 53.55 billion) on February 29, 2016, as per an analysis of equity investment by the Employees' Provident Fund Organisation (EPFO).
The analysis of EPFO investments in equity market will be placed before apex decision making body Central Board of Trustees, headed by the Labour Minister, in its meeting on March 17.
The EPFO started investing in ETFs in August last year after the CBT in March cleared proposal to invest in equity markets.
The board specified that it will invest 5 per cent of incremental deposits in the current fiscal.
However, the Finance Ministry has allowed private provident funds to invest a minimum of 5 per cent and a maximum of 15 per cent in equity and equity related schemes.
Trade unions have been opposing the decision to invest in equities or equity-linked schemes in view of market volatility.
"We have been opposing investments in the stock market. We will also raise this issue in the next meeting of CBT on March 17. We are custodian of poor workers money and safety of their provident fund is our concern," Hind Mazdoor Sabha Secretary and and EPFO trustee A D Nagpal said.
D L Sachdev, All India Trade Union Congress Secretary and an EPFO trustee, said, "The decision to invest in equity market was wrong. We will demand for rolling back of this decision in next meeting of CBT. We cannot continue with such loss-making investment."
EPFO is expected to receive an incremental deposit of Rs 1.15 lakh crore in the current fiscal.
It manages a corpus of over Rs 8.5 lakh crore with subscribers' base of over five crore across the country.
Unions oppose tax on provident fund withdrawals
Small savings schemes turn unattractive, PF to earn more
Government calls meet to review gold monetisation scheme
Proposal to tax EPF withdrawn
EPFO may pay 9% interest for 2015-16