Labour panel questions investments from EPF corpus during coronavirus pandemic2 min read . Updated: 21 Oct 2020, 07:21 PM IST
- EPFO has now been subsumed in the labour code so a section of panel members wanted to know what kind of an impact this would have
- The government officials also questioned how the reduced EPF contribution impact beneficiaries of the scheme
NEW DELHI : The parliamentary committee on Labour on Wednesday raised doubts about the step taken by the union government to make investments from EPF corpus during the coronavirus pandemic. The issue came for discussion on Wednesday and the standing committee has asked the officials to submit all the replies in writing after found to be not satisfactory.
The meeting of the standing committee on labour called on Wednesday was on the subject of functioning of the EPFO with special reference to the EPF Pension Scheme. According to people aware of developments, one of the key concerns flagged in the meeting was over the EPF corpus investing in equities and the kind of results it has shown.
“Investments were made from EPF corpus in the month of March when it was known that situation was gloomy yet investments were made in equity and debt instruments, mainly in equity. Questions have been raised why the concerned authorities went ahead with the investment when it was in know that economic situation was not favourable. What was the need? We are not satisfied with the oral replies of representatives of ministry of labour and that is why we have asked them to send us the replies in writing," said a person in the know of development.
Members of the standing committee also pointed out that by March this year, it was well-known by all the assessment of the union government that there was a possibility of negative return on investments and questioned who had sanctioned these investments made from the EPFO corpus.
“A portion of the EPF fund or the corpus, have gone to markets. That amount, we asked them what is the share of the corpus that has gone, to which companies and what is the position now and where it is available for refund by that institution. Several companies have been hit during the pandemic, their ratings have gone down so one concern was also raised whether they are in a position to refund that amount," a person aware of developments said requesting anonymity.
Another issue which got discussed in Wednesday’s meeting was that the working of the EPFO has now been subsumed in the labour code so a section of panel members wanted to know what kind of an impact this would have. The government officials also questioned how the reduced EPF contribution impact beneficiaries of the scheme. Another suggestion which came up in the meeting was whether there could be a possibility of the EPF considering a social security scheme for unorganized and home based workers.
“The government officials said that only a share of the funds has gone to public markets and there should be no cause of concern. Now, they have been asked to give a detailed written statement to the committee on it which is expected to be submitted in 15 days," the person quoted above added saying that another meeting of the committee could be called in the first week of November after which it would submit its recommendations to the centre.