The Hindu Business Line : Move to convert IE&PF funds into interest bearing deposits cleared

A PARLIAMENTARY panel has endorsed the Ministry of Company Affairs' (MCA) proposal of converting the amounts credited to the Investor Education and Protection Fund (IE&PF) into an interest-bearing deposit.

In its report, the Standing Committee on Finance, which was considering the demands for grants (2005-06) for the Ministry of Company Affairs, expressed dismay that a huge amount of money deposited by the companies was not being utilised for the objective for which it was constituted. IE&PF has to its credit about Rs 352 crore up to December 31, 2004 and about Rs 100 crore is added every year to the Fund. This amount mainly comes from four sources - share application money, debentures, unpaid dividends and unclaimed deposits.

However, this amount is credited to the Consolidated Fund of India and budgetary allocation is made by Parliament every year to run activities under IE&PF. "In this way the Ministry contributes more funds to the Consolidated Fund of India than getting from it," the Committee observed.

The Secretary, Ministry of Company Affairs, Ms Komal Anand, informed the Committee that the Ministry is making a proposal that funds could be considered to be kept as interest-bearing deposit which should flow back to them in the form of each year's budget for taking up investor awareness activities. The Committee agreed with this proposal and wanted the Government to clear the suggestion as and when received.

As far the utilisation of the money, the Committee felt that a lot more was to be done. As per the Ministry's own admission to the Committee, the activities under IE&PF need to be expanded by taking up the Financial Literacy Programme in a big way, the report said. Further, the Ministry has submitted to the Committee that a professional agency was proposed to be taken on to advise IE&PF on various activities.

The Parliamentary Committee recommended to the Government that no effort should be spared to take up awareness activities and the proposal to engage a professional agency may be expedited. Further, the Committee expressed concern that the activities under IE&PF have little penetration in the rural areas. It suggested that more NGOs and voluntary organisations should be encouraged to take up the task of educating rural investor.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Move to convert IE&PF funds into interest bearing deposits cleared

Indian soldier gets dressed to kill