The finance ministry is believed to be against Employees Provident Fund Organisation (EPFO) investing in high interest yielding postal deposits, and has asked EPFO to mobilise own resources to meet the shortfall of over Rs 900 crore for paying 1% additional interest to four crore PF subscribers.Sources said the ministry is of the view that EPFO should improve its recovery to bridge the shortfall. However, as much as 70% of the arrears due from employers are locked in the legal process, making it difficult for the organisation to go for recovery in full steam.In view of this, the labour ministry has been considering a proposal to park a portion of its funds in postal deposits and NSCs in a bid to earn better returns on investments.Labour minister K Chandrasekhar Rao had recently said the proposal of changing investment patterns, including investing in postal deposits, NSCs and equities, would be taken up at the meeting of the central board of trustees of EPFO later this month.At present, EPFO is prohibited from investing in equities, and the bulk of investments go into government paper and public sector bonds.As per the existing investment pattern, EPFO is mandated to invest 40% of assets in government securities (25% in central papers and 15% in state papers) and 40% in PSU bonds.The remaining 20% could be invested in any of the above two including 10% in private sector debts provided they are rated by at least two rating agencies.
