EPFO panel against investing funds in stock markets
Press Trust of India / New Delhi Mar 26, 2009, 19:34 IST
The Employees' Provident Fund Organisation's advisory committee today turned down a proposal of the Finance Ministry to invest up to 15 per cent of its corpus in stock markets.
The Finance and Investment Committee of the EPFO, which met this morning, unanimously rejected the proposal for parking up to 15 per cent of its funds totalling around Rs 1,82,000 crore into shares of listed companies as also equity linked schemes of Mutual Funds.
The committee, sources said, was opposed to the proposal of the Finance Ministry in view of the volatility witnessed in the stock markets in the recent past.
The Finance Ministry in August last year had suggested a new investment pattern to the EPFO under which the organisation could park up to 15 per cent of its funds in the companies listed on Bombay Stock Exchange and National Stock Exchange and also the equity-linked schemes of Sebi-regulated Mutual Funds.
The recommendations of the finance and investment committee are usually accepted by the EPFO's Central Board of Trustees, which is headed by the Labour Minister, which has the final say on such matters.
Instead of putting the EPF money in purchasing the shares from the Stock market it is better to drink "Sharab". But why the Board of EPF not lend money at the rate of 9% or 9.5% to our PSUs directly where the money is safe. Our PSUs are financially well managed. Capital is being invested by them only in the core business of the companies while the private companies are diverting funds in purchasing shares from the market. EPFO panel deserves congratulations not to invest Rs. 180,000 crore in stock market. FIIs are in serch of such funds which will be taken away by them to out of India through manipulation in the stock market. Hence I suggest that this money of Rs.1,80,000 crore should be given on interest to our PSUs who are bringing silent economic revolution in the country.
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