EPFO looks to invest in infrastructure debt fund

The move, if it goes through, will also help the cash-strapped core sector that requires an estimated $1 trillion over the next five years.

“If we can invest in bonds of infrastructure companies such as Power Finance Corporation, we should also be able to invest in bonds of the IDF. There should not be any distinction,” a senior EPFO official said.

The EPFO, through the labour ministry, has already begun talks with the finance ministry on the issue, the official said. A meeting between secretaries of the two ministries is expected to take place later this month to discuss easing of the EPFO’s stringent investment pattern for this purpose.

With rising asset liability mismatch banking sector funds for long gestation core sector projects have largely dried up and the finance ministry has been pushing for more investment in the infrastructure sector by insurance as well as pension funds.

While the department of economic affairs had earlier written to the EPFO to invest in infra debt funds, the department of financial services has also asked the insurance regulator IRDA to relax norms for insurance firms to allow for greater investment in the infrastructure sector.

“We need more investment opportunities, if we have to better returns for our subscribers,” the official pointed out.

... contd.