The parliamentary standing committee on Labour has raised questions over the central government making investments in the equity market from the Employees Provident Fund corpus during the coronavirus pandemic.
The committee raised its doubts in a meeting held on Wednesday over the functioning of the, especially the EPF Pension Scheme. The committee asked the Labour Ministry officials to submit all the replies in writing after those were found to be not satisfactory, according to a report in the LiveMint.
People familiar with developments in the meeting told the LiveMint that the members of the standing committee asked why the concerned authorities made the investments mainly in equity and some in debt instruments in March when it was widely known that there was a possibility of a negative return on investments as the market was hit by the pandemic. The committee also questioned who had sanctioned the said investments.
The EPFO manages social security funds of workers in the organised and semi-organised sector in India and has more than 6 crore active members.
The standing committee apparently also asked how much of the EPF fund has been invested, “to which companies and what is the position now and where it is available for refund by that institution.” They underlined that concern about refund as many of the companies have been hit by the pandemic while their ratings have been downgraded.
Questions were also raised over how the working of the EPFO will be impacted now that it has been subsumed in the labour code. The government officials asked how the reduced EPF contribution would impact the beneficiaries.
According to a report in the Financial Express, the committee has also asked the government to take a speedy decision on enhancing the monthly minimum pension under the Employees’ Pension Scheme, 1995, which is run by the EPFO. The board of trustees, the top decision-making body of the EPFO, had last year recommended increasing the monthly minimum pension to Rs 2,000-3,000 from the current Rs 1,000. However, more than one year on, the government has not taken any decisions regarding this.