Retirement fund manager EPFO on Wednesday said that it is not considering any proposal to invest a part of its huge corpus of around Rs 6 lakh crore (Rs 6 trillion) in stock markets.
"We are not considering any proposal to invest in stock markets or equity at present," Employees' Provident Fund Organisation's (EPFO) Central Provident Fund Commissioner K K Jalan told PTI.
He said this in response to media reports that EPFO has no alternative but to change its investment norms to invest in equity markets.
Jalan said, "During the recent meeting of the EPFO's trustees, proposed pattern of investment by Finance Ministry was discussed and the Board was not in favour of investing in equities and Exchange Traded Funds (ETFs)."
However, the EPFO's apex decision making body, the Central Board of Trustees headed by the Labour Minister, had decided to recommend making the pattern more flexible to further increase the percentage of investment in government securities.
The Finance Ministry has been pitching for EPFO funds to be invested in the equity markets to maximise their yields.
However, following strong opposition from unions in view of the volatile nature of stocks, EPFO did not opt for equity investment.
The Finance Ministry had allowed the EPFO to invest up to 5 per cent of its funds in equity in 2005 and enhanced the limit to 15 per cent in 2008.
A recent notification by the Labour Ministry allows the EPFO to invest up to 5 per cent of its funds in money market instruments, including units of mutual funds and equity-linked schemes regulated by the Securities and Exchange Board of India. The EPFO has more than 5 crore subscribers across the country.
It provided interest of 8.75 per cent on PF deposits in 2013-14. The EPFO trustees have recently decided to pay interest of 8.75 per cent in this financial year.
