Facing an uphill target, the Department of Disinvestment (DoD) wants EPFO to invest Rs6,000 crore in the country’s only exchange traded fund of PSU stocks, but the retirement fund body is now keen on investing only Rs1,000 crore.
The Employees Provident Fund Organisation (EPFO) had earlier committed to the Finance Ministry that it will start investing from August 1 in the CPSE ETF, a top official said.
The ETF is a pool of shares of 10 blue-chip state-run firms, including ONGC, GAIl, Coal India and IOC.
But the pension fund body has not yet reverted to the DoD on how much it will invest and when.
“EPFO is dilly dallying on its commitment to invest in CPSE ETF. They said they would invest from August 1, but have not yet come up with any proposal,” the official told the news agency.
The official further said that the EPFO is now insisting on a longer term track record of returns on CPSE ETF investments, which is not possible as the fund has started operation only in March last year.
When contacted EPFO’s Central Provident Fund Commission K K Jalan told the news agency that EPFO has decided to invest 5 per cent of the incremental deposits in ETFs every month but said no decision on how much to invest in the CPSE ETF have been made.
The Government had first launched a CPSE ETF, comprising scrips of 10 PSUs, in March 2014 under which retail investors have to invest a minimum of Rs5,000 to buy units.
The Finance Ministry is planning to launch a revamped and retail investor-friendly CPSE ETF soon.
The ETF forms part of Government disinvestment programme of current fiscal through which DOD targets to raise Rs41,000 crore by selling minority stake in PSUs.
“We asked EPFO to put Rs6,000 crore. They saying it is too high.
They say trade union representatives are not agreeing. They are okay with Rs1,000 crore,” the official added.