Thursday, February 10, 2011

The Finance Ministry has been urging the trustees of the Employees Provident Fund Organisation, EPFO to invest some of its funds in the stock market ( Times of India 09.02.2011 ) saying that it will increase the fund's profits. The trustees are reluctant to put money in volatile markets preferring to invest in safe government bonds with regular interest payments which seems sensible. Why is the finance ministry so keen for the fund to invest in the share market? With criminal politicians and thieving civil servants involved it cannot be for the good of the workers who have contributed to the fund over a life time of labor. Do they know something that we do not? The Sensex has fallen from over 20000 at the start of the year to 17463 today, a drop of 12%. Foreign investors,FII are selling off due to concerns over inflation and interest rates. The Congress and the free loading press are telling us constantly how the economy will continue to grow at 9% but maybe the outlook is not so rosy after all. If the FII continue to dump stocks they could suffer losses due to falling prices. The EPFO manages trillions of rupees and any hint of it investing in shares will send the market soaring. The speculators and FIIs can then exit at hefty profits at the expense of poor workers. So who is the finance ministry batting for? Are they concerned about their business friends whose companies are losing valuation as the Sensex falls? Are they worried about the builder lobby who are struggling with unsold properties and would love to raise money from the market? Or are they concerned about friends who have invested black money through the PN route? Wish we knew.

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