Post office funds get MF managers

CABINET DECIDES

The Union Cabinet today appointed public sector mutual fund managers "" the Unit Trust of India Mutual Funds (UTI MF) and the State Bank of India Mutual Fund (SBI MF) "" for investment of Post Office Life Insurance Fund (POLIF) and Rural Post Office Life Insurance Fund (RPOLIF) by relaxing the provisions of general financial rules.

The two public sector mutual fund managers are expected to invest the sum into the capital market.

Finance Minister P Chidambaram told reporters that the move to allow SBI and UTI mutual funds to use the post office funds followed the Department of Posts decision to invest the funds for better returns.

The finance minister said since Life Insurance Corporation (LIC) was a competitor for POLIF and RPOLIF, it was not considered for the purpose.

When asked if the postal money would find its way to the stock market, Chidambaram said it was up to the fund managers to decide.

Chidambaram added that the PSU fund managers were expected "to follow safe and conservative investment policies" for the money, raised largely from rural areas.

POLIF has a corpus of Rs 8,934 crore, while in the case of RPOLIF the sum stood at Rs 1,625 crore as on March 31, 2006. "Much of this money has already been invested, but the MFs will manage the accumulated funds," he added.

Chidambaram said the scheme had been formulated on the lines of the National Investment Fund, a disinvestment corpus that has been entrusted to three PSU managers "" LIC, SBI and UTI.

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OTHER DECISIONS

Government to go ahead with the setting up of mobile courts at panchayat level. The Cabinet gave its approval for further pursuing the Gram Nyayalayas Bill in Parliament and to move official amendments in the Rajya Sabha. First Class Magistrates will head the Nyayalayas

Nod to construction of road from Zaranj to Delaram in Afghanistan at an expense of Rs 746.79 crore. The project would give India improved access to Afghanistan and Central Asia.

Nod to the textiles ministry's proposal for setting up of Sardar Vallabhbhai Patel Institute of Textiles Management at Coimbatore with an investment of Rs 29 crore during the Eleventh Plan period

Modernisation of observation and forecast facilities of India Meteorological Department

Nod to the hospital patient care allowance for categories of Group C and D (non-ministerial) employees working in Railway Health Units, Hospitals and Super Speciality Railway Hospitals. Group C and D categories employees will get hospital care allowance at the rate of Rs 700 per month and Rs 695 per month, while patient care Allowance shall be admissible at the rate of Rs 690 per month to both the categories.

Coverage of Ex-Servicemen Contributory Health Scheme to be extended to Uniformed Coast Guard Pensioners and retired personnel of Defence Security Corps

Nod to extension of the National Commission for Safai Karamcharis from January 1, 2008 to March 31, 2009

Nod to an agreement with Senegal for avoidance of double taxation