ESIC to invest surplus funds in stock market through ETFs

New Delhi: Government's social security body Employees' State Insurance Corporation (ESIC) on Sunday approved a proposal to invest its surplus funds in the stock market through exchange traded funds (ETFs).

The decision was taken in the 189th meeting of ESIC held on Sunday at ESIC headquarters under the chairmanship of Union labour minister Bhupender Yadav, a labour ministry statement said.

Due to relatively low returns on investments in various debt instruments coupled with the need to diversify investment, ESIC gave its approval for investments of surplus funds in equities restricted to ETFs.

The investment will start with 5 per cent of surplus funds and will increase up to 15 per cent, based on the review of the investment after two quarters, it stated. The investment will be confined to Exchanged Traded Funds on Nifty and Sensex. It will be managed by fund managers of asset management companies (AMSs), the statement said.

Equity investments will be monitored by the existing custodian, external concurrent auditor and consultant looking after the debt investments, it said.

Acknowledging the increase in the number of insured workers and their dependents coming under the ambit of ESI Scheme, Yadav directed ESIC to focus on strengthening the infrastructure.

He further informed that the 'Nirman Se Shakti' initiative has been started to strengthen and modernise the infrastructure of ESIC hospitals and dispensaries in a phased manner.

During the meeting, Rameswar Teli, Minister of State for Labour and Employment, informed that the latest technologies are proposed to be adopted by ESIC for construction and monitoring of projects using drones and an online real-time dashboard.