The central government Minister for Labour Welfare, Mr. Bandaru Dattatreya, informed that the central government is planning invest more Provident Fund amounts in government bonds.
The minister explained that the current practice has been to invest up to 50% of the Provident Fu8nds in Public Sector Government Bonds. The plan now is to increase this from 50% to 65% of PF being invested in public sector government bonds.
A meeting of the Provident Trust Board is scheduled tomorrow (Wednesday, 30th April).
A decision will be taken during this meeting regarding the proposal for additional investment of PF in government bonds. This decision has been taken to encourage construction activities in the industry sector.
The practice of investing PF in stock market will also continue.After the investment of 65% PF in government public sector bonds, the balance will be invested in Private Sector Bonds and stock market.
EPFO has been discussing with the Ministry of Highways regarding investment of Rs. 50000 Crores from PF. However, a decision is yet to be taken. EPFO has been asking for 8.75% interest rate.
Meanwhile, demands are being made to withdraw from this decision.
From August 2015, an amount of Rs. 5920 Crores from PF has been invested in the stock market. Since the stock market is currently not so healthy, there is a value reduction by 9.54%. As on 29th February, the amount of Rs. 5355 Crores is available. So, there is a demand to withdraw from this decision.
However, the Finance Ministry has already announced that a maximum of 15% can be invested in the stock market. EPFO has decided to invest 5% of the additional PF deposits each year in the stock market.
It is expected that an additional amount of Rs.1.12 Lakhs will be realised by the end of the Financial Year on 31st March. EPFO is handling Rs. 8,5 Lakh Crores. There are more than 5 crores subscribers of Provident Fund.
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