New Delhi: India plans to lift the cap on equity investments made by the Employees Provident Fund Organisation (EPFO), the main state provident fund, to 15 percent from 5 percent, Minister of State for Finance Jayant Sinha said on Thursday.
Sinha told a business conference that the government is aiming to stabilise domestic equity markets by allowing greater investment by pension funds, which are typically long-term investors.
The EPFO manages $100 billion in savings that are now mainly invested in government bonds paying a fixed rate of interest.
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Last week, the regulator of another, smaller, state pension fund said the government may raise its cap on equity investments on behalf of government workers to 50 percent of assets under management.
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The sums involved are small in relation to the $1.5 trillion market value of the Bombay Stock Exchange, but could grow quickly as Prime Minister Narendra Modi seeks to broaden India`s tiny pensions net to cover more workers.
