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Decision Soon On Increasing EPFO Investments In ETFs, Says Labour Minister
Noting that EPFO's investments in Exchange Traded Funds have given good returns during March and April this year, Union Labour Minister Bandaru Dattatreya has said these investments would be increased and the quantum for coming year would be decided soon
Photo Credit : Reuters
Noting that EPFO's investments in Exchange Traded Funds (ETFs) have given good returns during March and April this year, Union Labour Minister Bandaru Dattatreya on Monday (06 May) said these investments would be increased and the quantum for coming year would be decided soon.
"On March 31, 2016, we invested an amount of Rs 6,577 crore which gave return of Rs 6,601 crore, which is 0.37 per cent increase. On April 30, 2016, the amount we invested was Rs 6,674 crore which gave return of Rs 6,786 crore. It is up to 1.68 per cent plus (gain)," Dattatreya told reporters in Hyderabad.
Observing that the good investments should dispel any apprehensions about the EPFO funds being invested in the ETFs, he said the Labour Ministry would deliberate on the matter after he returns from the International Labour Conference to be held in Geneva for three days from tomorrow.
"Why I am explaining is, by investment pattern, we are increasing our profits. That's why there will not be any apprehensions. By investing in ETFs, there will not be a loss.
Number two, world over, the fund management is done by equity participation which is giving higher interest rate. That means good returns are coming.
"We have option (to invest) up to 5 to 15 per cent. So far we have gone (invested) to five per cent. Now, after coming from Geneva, my ministry will sit to decide further more to increase the investment in the coming year," he said.
The government made an investment of Rs 7,000 crore till May 31 this year 75 per cent in NSE and 25 per cent in BSE, he said.
Recalling that the Finance Ministry issued a notification for 5 to 15 per cent of equity participation, he said a decision was taken to invest five per cent during 2015-16.
"The Ministry of Finance issued a notification that we can do (investments) in Exchange Traded Funds between 5 to 15 per cent. Accordingly, in 2015-16, we will do five per cent investment of the amount we get every year. In 2015-16, we got an amount of Rs 1,15,000 crore. We decided to invest five per cent of that," Dattatreya said.
"As on today, that is till May 31, 2016, we made an investment of Rs 7,000 crore. We invested 75 per cent in National Stock Exchange and 25 per cent in Bombay Stock Exchange," he said.
The corpus fund available with EPFO presently is Rs 7,53,000 crore.
Replying to a query, he expressed hope that the EPF interest rate of 8.8 per cent (for 2015-16) would not come down next year.
Dattatreya, who is leaving for the International Labour Conference today, said the conference in Geneva would be held for three days.
He said he would speak at the conference tomorrow.
India has got the chairmanship of Asia Pacific Countries (ASPA) at the conference and that he would chair a meeting, Dattatreya said.
He would hold meetings with ministers of Iran, Japan, Sri Lanka and also non-aligned ministers' conference.
The labour minister said he would offer to hold a meeting of BRICS countries in India. The meeting was held in Russia last year.
The problems of labour sector, including supply chain management, demand and supply of workmen in different countries and migration of international labour would be discussed in the conference.
India will seek the cooperation of ILO, World Bank and other international organisations as the work force in the country is huge, he said.
The best practices in the labour sector and the initiatives of the NDA government like 'Make in India' would also figure in the talks.
India is expected to play a crucial role in International Labour Organisation, he said.
"Two years of this government, mainly governance and initiatives, there is a positive atmosphere building up internationally," he said.
Dattatreya hailed Prime Minister Narendra Modi's endeavour for welfare of Indian workmen during the latter's visit to Gulf countries.