EPFO Investment in Equity: A strong boom is being seen in the stock market these days. In such a situation, in order to give better returns to its subscribers, EPFO is considering increasing the investment in the stock market to its maximum limit. Apart from this, the options of reinvesting the income earned by EPFO from investing in Exchange Traded Funds in equity are also being considered. EPFO will soon seek approval from the Finance Ministry to increase the investment limit in the stock market.
In the meeting of the EPFO board held in the month of March this year to rate EPF for 2022-23, it was approved to re-invest the income from investment in exchange traded funds in equity instruments. If this amount is invested, EPFO’s investment in the stock market will increase to 15 per cent. At present, EPFO’s investment in the stock market is only 10 per cent of the total corpus while there is a limit of investing up to 15 per cent.
EPFO started investing in the stock market in 2015-16. When he was allowed to invest only 5% of the total corpus. EPFO started investing in equity through ETFs. The limit for investment in equity was increased to 10 per cent in 2016-17 and 15 per cent in 2017-18. According to the data, till March 31, 2022, EPFO had invested Rs 1.01 lakh crore in equity through exchange traded funds, which is 9.24 percent of its total corpus of Rs 11.01 lakh crore. But EPFO is now considering increasing investment in the stock market so that EPF subscribers can be given more interest on their investments. EPFO can invest the income from ETF in equity and other related instruments.
EPFO can currently invest 15 per cent of its total corpus in equity. But the idea of increasing this limit is also going on for a long time. But considering the market conditions, permission is not being given. While the Finance Audit and Investment Committee (FAIC) of EPFO has already approved increasing this limit from 15 per cent to 20 per cent.
EPFO had reduced the EPF rate to 8.1 per cent for 2021-22 due to low earnings. Which was the lowest since 1977-78. EPFO has decided to pay 8.15 percent interest for 2022-23. By increasing equity investment, EPFO wants to give more returns to its subscribers.
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