The controversy over the performance of Unit Trust of India may upset the government's plans to include UTI schemes in the investment portfolio of the Provident Fund Trust.
"We are not going to support the move. We think UTI units are not an investable portfolio. The controversy has made it all the more difficult for us to support the move," W R Varada Rajan, member of the PF board and leader of the Centre of Indian Trade Unions (Citu), said.
Trade union representatives in the PF Board are expected to scuttle the move when the matter comes up in the next meeting. The date of the meeting has not yet been fixed.
The government has been trying to expand the investment format of the PF corpus to include UTI schemes.
The move was opposed by trade union representatives when the matter recently came up before the finance and investment committee of the PF Board.
RBI had advised the government that UTI schemes could be included in the investment format of PF only after the PF Act is amended. The finance and investment committee agreed with RBI's view and referred the matter to the PF Board.
Once the matter receives concurrence of the PF Board, the board will approach the government to amend the provident fund scheme in order to change the investment format.
The finance and investment committee had sought information from State Bank of India, which is the investment manager of the PF board. These are:
* the average yield of the fund
* total cumulative investments made up to March 31
* deviation from the required pattern month-wise for the current year
* the amount lying in public account.
