New Delhi : The Finance Ministry has proposed allowing retirement and gratuity funds to invest up to 30 % of their money in the equity market, a suggestion that’s likely to be opposed by labour unions.
According to the proposals, non-government provident, pension and gratuity funds can invest up to 15 % in shares of companies that have derivatives or in mutual funds. As much as 15 % can be invested in exchange traded funds, index funds that replicate the portfolios of the Sensex or Nifty, or derivatives including credit default swaps. The funds will be permitted to invest up to 40 % in government bonds. However, worker groups including the Bharatiya Mazdoor Sangh (BMS) and the All India Trade Union Congress have decided to oppose any move to allow the Employees’ Provident Fund Organisation (EPFO) to invest part of the over Rs 5 lakh crore it holds in the equity market. “Earlier, we opposed any investment by EPFO in the equity market. We will oppose it again as it is poor workers’ money,” BMS All India General Secretary Virjesh Upadhya told PTI.