The investment in the infrastructure sector is expected to yield good returns in the coming years. After the 229th meeting of the Central Board of Trustees (CBT), Labor and Labor Secretary Sunil Bertwal said investments would initially be limited to public sector funds. The government has made it clear that if the EPFO wants to provide better returns to consumers, it will have to follow the investment model announced by the Finance Ministry. The EPFO said the Central Board of Trustees had decided to lift restrictions on investments in private corporate bonds. Trustee K.E. Raghunathan said.
Currently EPFO About 45-50% of the investment is in government stocks, 35-45% in debt instruments, 5-15% in equities and up to 5% in short-term debt instruments. EPFO’s monthly investment ranges from Rs 15,000 crore to Rs 16,000 crore. Annual investment ranges from about Rs 1.8 lakh crore to Rs 1.9 lakh crore. Long-term savings need to be channeled into productive infrastructure investments, such as the National Infrastructure Pipeline, as directed by the government. Anant Narayan of SPJIMR said that this will not only increase revenue but also help in achieving sustainable growth of the country.
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Currently, there are strict restrictions on investing in things like pension funds, provident funds and insurance companies. He added that instead of limiting the nature of their investments, investment committees, which operate professionally for organizations, should be given more autonomy to control risk and returns within the confines of the principle. Recently, the government has allowed up to five per cent investment in asset-backed and trust-structured investments, including alternative investment funds, real estate investment trusts and units of infrastructure investment trusts.
The Central Board of Trustees is a body consisting of representatives of the government, workers and employers. EPFO They have a huge influence on decisions. It is headed by the Minister of Labor. The meeting also decided to form four sub-committees comprising board members and government representatives on the part of employees and employers. The Minister of Labor will chair two committees on issues related to the institution and the future implementation of the Social Security Code. The remaining two committees on digital capacity building and pension issues will be headed by the Union Secretary for Labor and Employment.