The Central Government would notify an interim investment pattern for funds collected under the New Pension Scheme (NPS) that will allow 5% investment of the corpus in the capital markets. Under NPS, the Centre and the states have collected about Rs. 1500 crores till date. The interim scheme would also have a provision to invest all the NPS money in government bonds. The proposal has been backed by 19 states.
The initiative has been designed so to allow more funds to flow into the capital markets and provide an opportunity for better returns to NPS subscribers. The NPS corpus earns only 8% interest at present. The government plans to appoint fund managers to handle the investments and the first one is likely to be from the public sector. The decision is being opposed by the Left parties and Left-ruled states of West Bengal, Kerala and Tripura who have rejected the proposed investment pattern. They feel that subscribers should not be subjected to risks associated with stock market investments.
Read more details in The Economic Times.
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