Source | NDTV
The workers’ money in Employees’ Provident Fund Organisation (EPFO) has not been diverted to stock markets but it is invested in funds which are safe and profitable, the government said in the Rajya Sabha.
Replying to a calling attention motion of Ahmed Patel (Congress), Labour and Employment Minister Bandaru Dattatreya asserted that his “paramount interest will be safeguarding of the workers’ interest.”
Patel’s motion was on the alleged diversion of money from Employees Provident Fund (EPF) to stock market.
Describing the allegation as “totally incorrect”, the minister said, “There is no question of diverting funds. This government is pro-poor, pro-worker and pro-progressive…We have made (investments) in Exchange Traded Funds (ETFs) and not in share markets.”
ETF is a fund which holds several assets such as stocks, commodities or bonds and most ETFs track an index like a stock index or a bond index.
On the quantum of investments in ETFs, he said a March 2, 2015 notification by the Finance Ministry had prescribed minimum 5 per cent of the investible deposits and maximum 15 per cent in ETFs.
Besides, the Para 52 of the EPF Scheme, 1952, mandates that the investment will be made in accordance with the notification of the central government.
Of the total amount, 75 per cent is being investment in Nifty and the remaining 25 per cent in BSE, he said. “In Nifty there are 50 baskets and in the BSE, 30 baskets. The funds are not invested in individual shares,” he added.
The total amount invested, so far, is Rs 7,468 crore and its current market value is Rs 8,024 crore, which is an interest of 7.45 per cent, the minister said.