An advisory body of retirement fund manager EPFO, on Tuesday turned down the finance ministry’s proposal to invest 3-5 per cent of Rs. 2.57 lakh crore corpus in stock indices.
The Finance and Investment Committee (FIC), which gives its recommendations to EPFO’s Central Board of Trustees (CBT), rejected the proposal in its meeting on Tuesday, sources said.
CBT, is likely to take the final call on the issue on December 5.
It is a general practice that the advisory body FIC’s recommendations are upheld by CBT.
The proposal to invest 3 to 5 per cent of Employees’ Provident Fund Organisation corpus in indices, if accepted, means a massive Rs. 13,000 crore flow into equity markets.
The finance ministry had proposed in August last year to invest up to 15 per cent of the EPFO corpus in stocks. But when it did not find favour with FIC as well as CBT, it proposed an investment of 3-5 per cent of the corpus in indices.
The proposal meant that money could be invested in indices like Sensex, S&P CNX Nifty.
