The Labour Ministry is again facing resistance from the trade Unions as it seeks to raise EPFO minimum equity limit to 15 percent, say sources.
The Labour Ministry is again facing resistance from the trade unions as it seeks to raise Employees Provident Fund Organisation (EPFO) minimum equity limit to 15 percent, say sources to CNBC-TV18.
In the Central Board of Trustees (CBT) meet, which is likely to happen in the last week of March, the ministry will propose this idea. It also feels introduction of new exchange-traded funds (ETFs) requires wider participation from EPFO.
The trade unions are not on the same page as the ministry and do not want the equity investment limit to be increased. The union has also urged for a safety net to secure their equity investments.
In September 2016, EPFO had raised its minimum equity investment to 10 percent. Labour minister Bandaru Dattatreya said the decision had been taken considering the good returns on EPFO’s investment in exchange-traded funds (ETFs) and this hike in investment limit to 10 percent will result in additional investment of Rs 13,000 crore in stock markets in the current financial year.
The unions are also asking for a replacement of Manish Gupta, who is a senior ministry official, with someone from the trade union.