New Delhi: Whether or not a part of an estimated Rs5 lakh crore of employees provident fund (EPF) should be invested in the stock markets has become a bone of contention between the ministries of labour and finance, reports PTI.
While the finance ministry wants the labour ministry to work on investing about 15% of the Employees' Provident Fund Organisation (EPFO) money in stock markets for better returns without taking the issue to the PF trustees, the latter has decided to do otherwise.
Whereas the EPFO commands a corpus of Rs3 lakh crore, other provident funds, which follow the fund's investment pattern, have another Rs2 lakh crore.
In a letter to labour secretary P C Chaturvedi, finance secretary Ashok Chawla referred to the changes by EPF schemes earlier without any discussion in the Central Board of Trustees (CBT) and said, "It (labour ministry) can take a similar view on the issue of investment pattern."
However, the labour ministry has forwarded the letter to EPFO to take a view on the matter.
CBT is an apex decision making body for EPFO and is likely to meet on 10th September to take up the issue.
The finance ministry wants the labour ministry to follow investment pattern notified by it, which provides for up to 15% of the corpus in stock markets.
However, CBT's advisory body Finance and Investment Committee (FIC) yesterday stuck to its stand against investment of EPFO money into stock markets — either in shares or indices.
In his letter, Mr Chawla sought to remind the labour ministry that it used to adopt the investment pattern notified by the ministry of finance for many years.
"However, the ministry of labour has not adopted the investment pattern notified by the ministry of finance in January, 2005 and November, 2008 and investment pattern of the labour ministry continues to be the same which was earlier notified in July, 2003," the letter said.
Favouring the stand of no investment in stock markets, EPFO said at the FIC meeting yesterday that while investment in stock markets is subject to market volatility, "there is no risk of capital erosion in the case of EPF investments."
It also countered the finance ministry's claim that the New Pension System (NPS), which has an option to invest in stock markets, is giving better returns than EPF.
The finance secretary said in his letter that while NPS for central government employees could generate a weighted average investment return of 14.82% for the central government employees in 2008-09, EPF is giving only 8.5% returns to its subscribers for many years.
The EPFO has been giving 8.5% returns to its subscribers since 2005-06.
Countering Mr Chawla's views, EPFO said the income earned on EPF investments are actually realised, while the returns declared in NPS are notional and subject to market conditions.
This is so because, said EPFO, the returns generated under NPS are based on net asset value while the returns declared by EPFO are based on actual coupon received on its investments.
New Delhi: The government today made it clear that BlackBerry services may be banned if its maker, Research-in-Motion, fails to provide a monitoring solution in the next five days, reports PTI.
In a written reply to the Rajya Sabha, minister of state for telecom Sachin Pilot said, "In case no solution is provided, those services which can not be intercepted and monitored in readable format may be banned by the government."
The Department of Telecommunications (DoT) has instructed all telecom service providers to ensure that a technical solution for interception and monitoring of Blackberry services in readable format is made available to the law enforcing agencies by 31 August, 2010.
The minister's reply comes at a time when the security agencies and Canadian firm RIM are holding a crucial two-day meeting starting from today to decide the fate of Blackberry services in India.
The smartphone-maker, which has a subscriber base of one million in India, has been told in no uncertain terms that it must install its server with an Indian service provider.
On 12th August, the home ministry had demanded a technical solution by 31st August that would enable security agencies to peek into emails and chat messages sent via Blackberry Enterprises Server (BES) and BlackBerry Messenger (BBM).
New Delhi: Tyre makers' plea to bring down import duty on natural rubber to 7.5% from 20% at present has been turned down by the commerce ministry, reports PTI quoting the Rubber Board.
"Union minister for commerce and industry Anand Sharma has ruled out any cut in import duty of rubber from the present 20 per cent," Rubber Board chairman Sajen Peter said in a statement released yesterday.
Hit by steep rise in natural rubber price, Automotive Tyre Manufacturers Association (ATMA) had in March urged Prime Minister Manmohan Singh to allow duty-free import of at least 2,00,000 tonne of raw material and reduce import duty to 7.5% or double customs duty on imported tyre to 20% to help domestic manufacturers.
Rubber growers, however, fear that reduction in import duty may lead to dumping of cheap natural rubber from ASEAN countries which could have a cascading effect on the prices of natural rubber resulting into a drastic fall in prices in the domestic market.
The commerce minister made his views clear to a team of Parliamentarians from Kerala who called on him yesterday morning, the Rubber Board statement said.
"In the case of import duty, the government would be implementing the recommendation of the expert panel constituted under the directive of Delhi High Court to look into the demands raised in a petition by rubber consuming organisations," Mr Sharma was quoted as saying in the statement.
The expert panel had recommended that the import duty be retained at 20%, but a maximum ceiling of Rs20.46 be fixed, which is based on the average domestic price of rubber for the last three fiscals.
India imported 15,372 tonnes natural rubber in May this year compared to 17,976 tonnes in the same month last year.
Domestic rubber goods manufacturing industries consumed 79,150 tonnes of natural rubber in May this year vis-à-vis 78,250 tonnes in April.
The cumulative import in the first two months was 26,248 tonnes against 27,719 tonnes in the corresponding period last year. Consumption grew by 8.8% in the first two months to 157,400 tonnes over the same period last year.