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FM, labour ministry in talks for investments in IDFs: Reports

Both the ministries are in talks to create a separate segment for IDFs in PF investment pattern and a decision could be expected soon

November 15, 2012 3:10 IST | India Infoline News Service
To attract long-term investments in the infrastructure sector, the finance ministry is in talks with the labour ministry to allow provident funds (PFs) to invest in IDFs (infrastructure debt funds), the media reports said.

The labour ministry administers over Rs 5 trillion through the Employees' Provident Fund Organisation (EPFO), which manages the retirement savings of 60 million organised sector workers. Around Rs. 2 trillion is estimated to be managed by gratuity, pension funds run by India Inc and the new pension scheme (NPS) run by the Pension Fund Regulatory and Development Authority (PFRDA), the reports added.

Both the ministries are in talks to create a separate segment for IDFs in PF investment pattern and a decision could be expected soon. The finance ministry is also trying to convince the labour ministry to raise the ceiling for PF investments in private sector bonds from 10% to 40%, the reports said.

The Insurance Regulatory and Development Authority (IRDA) is also aiming to attract insurers to invest in IDFs. In its exposure draft on investment norms for insurers in October 2012, IRDA said that total investment in housing and infrastructure should not be less than 15% of the fund for life insurers and 5% for general insurers.



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