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A final decision on the amount of PF corpus to be invested in the stock markets will be taken within the next 10-12 days, Labour Minister Bandaru Dattatreya told reporters here on Friday, after trade unions locked horns with the Ministry on its push for investing higher than five per cent of the retirement funds in Exchange Traded Funds (ETFs).
‘Long-term benefits’ “In India, in the changing scenario, we had thought that long-term investment will benefit ETFs. Fluctuations will be there... they will come and go, but the thing is whether the percentage of investment in the long-term will be gainful or not,” the Minister said after a meeting of the tripartite Central Board of Trustees of the Employees Provident Fund Organisation (EPFO).
He said a special CBT meeting would be called between July 18-22 where the government would take feedback from the unions and then take a decision. Most of the unions, however, opposed the proposal in the meeting, after which the decision was deferred.
Reacting to the unions’ stance, Dattatreya said: “We respect whatever they (unions) are saying… we take their views as feedback... and we are presenting our points on ETF. It’s good for the country, for the subscribers and shall give better returns,” he said, adding that, “we have given a report to the CBT. In this report, 7.45 per cent (yield) has come so far. We had invested ₹7,000 crore.”
The EPFO had started investing in ETFs in last August, despite protests by unions. Indian National Trade Union Congress Vice-President Ashok Singh told PTI that: “Most of the unions strongly protested raising of EPFO investments in ETF.”
AK Padmanabhan, President, Centre of Indian Trade Unions, had earlier flayed the Finance Ministry of “partially amending” the investment pattern approved by the CBT.
“The existing investment pattern which was thoroughly discussed and finalised by CBT was notified on November 21, 2013, did not sanction any investment in share market and was being followed for investments from January 1, 2014. “On March 2, 2015, Ministry of Finance has amended the investment pattern by directing 5 to 15 per cent investment in share market and up to 5 per cent investment in other miscellaneous investments, like real estate investment trusts…. by limiting investments in government securities,” he had said in a statement.
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