New Delhi: The finance ministry is proposing changes in the investment norms for non-government provident funds as well as superannuation and gratuity funds to boost flow of funds into infrastructure and affordable housing — a move that is expected to trigger a fresh tussle with the Employees Provident Fund Organization, which usually rejects North Block's suggestions for more liberal rules.
The finance ministry is suggesting changes in the investment rules from April 2015, with the draft rules having been finalized at the behest of the highways ministry, which is looking at long-term funding to finance highways, where private developers are finding it tough to raise resources, given the high leverage levels and reluctance of banks to lend.
As a result, within the overall ceiling of 55% investment in debt and related instruments, the finance ministry is recommending investment in listed, or proposed to be listed, debt securities issued by companies engaged mainly in "the business of development or operation of infrastructure or construction/ finance of low-cost housing". Similarly, infrastructure debt funds will also be eligible investments. The only rider is a minimum credit rating of 'AA'.
Apart from railways, it will also include securities issued by any authority, which is not a "body corporate" and has been formed solely for promoting development of infrastructure.