ESIC to invest up to 15 per cent surplus funds in equity through ETFs

In a bid to accrue better returns on its surplus funds, the government, on Sunday, allowed Employee State Insurance Corporation (ESIC) to invest up to 15 per cent of its surplus funds into equity through exchange-traded funds (ETFs).

The decision was taken at an ESIC meeting chaired by the Union labour minister Bhupender Yadav at the corporation's headquarters in New Delhi.

A labour ministry statement said that the decision to invest surplus funds into equity was taken due to the low returns on debt instruments and the need to diversify the corporation's portfolio. Initially, the investment will be restricted to exchange-traded funds. 

"The initial investment shall start at 5 per cent and increase up to 15 per cent gradually, after review of two quarters. The investment will be confined in ETFs, i.e., Nifty50 and Sensex. It will be managed by fund managers of Asset Management Companies (AMCs). The equity investment will be monitored by existing custodian, external concurrent auditor and consultant looking after the debt investments in addition to the management of the ETF for equity", the statement said.

Besides, the minister also emphasised strengthening the infrastructure at ESIC hospitals and dispensaries and approved the setting up of a new 100 bedded ESIC Hospital at Shyamlibazar, Agartala, Tripura and Idukki.  

Further, it was also decided to execute the capital works in ESIC through Central / State PSUs besides the Central Public Works Department (CPWD). A fresh empanelment of such central / state PSU will be invited by the ESIC for empanelment in due course.