Employees Provident Fund asks government to issue special bonds

THE Employees Provident Fund (EPF) has asked the government to issue special bonds for contractual savings institutions so that it can increase investment in government securities. The EPF and the Citizen Investment Trust (CIT) are the two contractual savings institutions operating in the country. Currently, the EPF’s investment in government securities amounts to 9.83 percent of its total investment. It wants to increase this figure to 15 percent. The EPF held resources valued at Rs 145.68 billion as of the end of fiscal 2012-13. “We have sent a formal letter to the Finance Ministry requesting it to issue special types of bonds for contractual savings institutions,” said Krishna Prasad Acharya, administrator of the EPF. “We have assured it that the EPF is ready to purchase Rs 5 billion worth of such bonds.” Currently, the government has been issuing foreign employment bonds as special bonds. The EPF’s request coincides with government plans to issue more bonds than treasury bills. The government has recently decided to issue bonds worth Rs 30 billion out of the total internal loans of Rs 44 billion it wants to raise this year. Acharya said that the EPF’s request was meant to make available long-term funds to the government to spend on development activities. “As bonds are also the safest investment, our members will feel secure,” he added. The EPF has 483,000 members. Acharya added that they had “informally” asked the government to fix the interest rate of such bonds at the inflation level. Meanwhile, the CIT said that it had not made any such request to the government but it was ready to invest in bonds. CIT Executive Director Rishiram Gautam said that they had been telling the government it also wanted to invest in local currency bonds likely to be issued by international institutions like the International Finance Corporation if the interest rate was in the range of 8-9 percent. Currently, the EPF’s investment in government securities amounts to 9.83pc of its total investment. It wants to increase the figure to 15pc