The Employees Provident Fund Organisation (EPFO), which has started investing in equities, would pump in about ₹5,000-6,000 crore in this asset class by the end of current fiscal and further flow will depend on market returns, a Union Minister said today.
The state-run pension fund’s Central Board of Trustees (CBT) would be asked to speed up the investment process, Union Minister of State for Labour Bandaru Dattatreya said here.
“For the first time, EPFO has taken this new initiative. Through Exchange Traded Funds, we are going to have participation under equity class. The process has already begun. Our portfolio managers, the SBI and others, they are on that job. Our Ministry has also formed some guidelines. With those guidelines and every month, we are progressing,” he said.
“By end of this financial year (FY16), approximately ₹5,000-6,000 crore will be in the markets. After that financial year, we will review the situation, how the things are going on, how the markets are giving benefits, then we will take further decisions,” he told PTI here.
Dattatreya expressed confidence that the process of investment in equities would give higher returns with the investments by EPFO being made with a long-term perspective.
“Our Central Board of Trustees (CBT) are there. I will definitely talk to them. This pattern of investment is long-term. In the long-term, equity participation will definitely get good results. Yesterday, I had lot of discussions in Mumbai also. A lot of people are welcoming (the initiative). This is a slow process. In the month of January and this month also, we wanted to call a CBT meeting, apprise them about situation and speed up the process,” he said.
Marking its maiden entry into stock market, the retirement fund body on August 6 announced its first equity investment through Exchange Traded Funds benchmarked to key indices Sensex and Nifty and promised to invest more than the current limit of ₹5,000 crore from the next year.
The first investment would be made through SBI Mutual Fund’s two index-linked ETFs - one to the BSE’s Sensex and the other to NSE’s Nifty.
The Minister had said EPFO will initially put only 5 per cent of its incremental fund flow (around ₹5,000 crore) but the cap could be raised to 15 per cent next year.
Replying to a query, Dattatreya said except the Child Labour (Prohibition and Regulation Amendment) Act, the bills related to proposed changes in labour laws are unlikely to be passed in the ongoing monsoon session of Parliament, which is witnessing frequent disruptions by Opposition over a range of issues.
“This session, all that is listed is Child Labour (Prohibition and Regulation) Amendment Act. That is coming in Parliament. But it is in the Rajya Sabha. In Rajya Sabha, they (Opposition) are very much adamant. They are not allowing us to go for this business. I feel that except Child Labour Act, the remaining legislations will come in the winter session of Parliament,” the Minister said.