Why investing in equity makes sense Ajit Dayal What joy do people get in keeping others poor?
That should be the question placed before the Central Board of Trustees who, on January 27, rejected the Finance Ministry’s proposal to invest 5 per cent of the Employees’ Provident Fund (EPF) money in the equity market. Presumably convinced that investing money in the stock market is risky and fraught with danger, the Trustees unfortunately were unable to decide on the fixed rate of return for the EPF’s 40 million subscribers. They will meet again this month to decide on what to do next. Not keeping pace with inflation The little information that flowed into the press suggested that if the Trustees had recommended a 8.5 per cent rate of return, the implied Rs 7,824 crore payout would have left the corpus with a deficit of Rs 450 crore (money earned would be less than money to be paid out). If the Trustees recommended a payout of 8 per cent, then the 40 million subscribers would get a total of Rs 7,364 crore and there will still be Rs 10 crore left in the kitty (money earned will be mo
