The Employees Provident Fund Organisation (EPFO) may be planning to raise its investment limit in equities to up to 20 percent of investible deposits from 15 percent now.
According to a PTI report, a proposal on the same would be taken up at a meeting of the EPFO’s Central Board of Trustees (CBT) that is likely to be held on July 29 and 30.
EPFO’s Finance Audit and Investment Committee have approved the proposal.
For a long time, there was speculation that such a move was likely to be taken up. Chaired by the Union labour minister, the CBT is the apex decision-making body of the EPFO.
If implemented, the stock market is expected to cheer this move as more money will be pumped into equities from the retirement fund body. At least Rs 36,000 crore of PF money is estimated to go to the equity market per annum.
EPFO equity exposure is getting good returns (notional), as per the labour ministry. While in 2019-20, its equity exposure earned a negative 8.29 percent, in 2020-21 this garnered a 14.67 percent and 16.27 percent in FY22.
As per Rameshwar Teli, Minister of State for Labour and Employment, the FIAC (Finance Audit and Investment Committee), which is a sub-committee of CBT, has recommended an increase of investment in equity and related investments in category IV of the Pattern of Investment from 5-15 percent to 5-20 percent.
He made his remarks in a written reply to Lok Sabha on Monday.
(With inputs from PTI)
