A chunk of the Rs. 91,000 crore corpus that the Employees’ State Insurance Corporation (ESIC) keeps in ultra-safe, but low-yielding fixed deposits (FDs) could find its way into stock markets and corporate bonds, with the Union government considering an expansion in its investment scope.
The move could open up new investment avenues such as mutual funds, corporate bonds, commercial papers of leading private banks, and even equities, two government officials aware of the plan said on condition of anonymity.
ESIC deducts a portion of salary from employees earning up to Rs. 21,000 a month, who are primarily industrial workers. The money is invested in fixed deposits of public sector banks and bonds of public sector units (PSUs), and the returns are used to provide medical assistance from primary to tertiary care to these staff and their families.
Unlike the Employees Provident Fund Organisation (EPFO)-the other social security body under the labour ministry with a larger corpus investing some of its annual accruals in stock markets through exchange-traded funds (ETFs)-ESIC does not have the mandate to do so.