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India may allow state pension fund EPFO to buy more stocks - minister

A man counts his currency after buying food from a street side restaurant in New Delhi, India, February 29, 2016. REUTERS/Adnan Abidi/Files

NEW DELHI (Reuters) - India is considering allowing the state-run social security and pension fund to invest more in the stock market, Labour Minister Bandaru Dattatreya said on Thursday.

Dattatreya said the government was examining a proposal to let the Employees’ Provident Fund Organisation (EPFO) invest 15 percent of its corpus via exchange-traded funds compared with 10 percent at present.

The issue would be taken up in the next meeting of the Central Board of Trustees (CBT) of the fund, he told reporters at an event organised by industry group Assocham.

The social security fund, which manages more than 8.5 trillion rupees ($127 billion), has been paying a return of over 8 percent to its near 40 million subscribers.

In August 2015, the fund manager entered the equities market for the first time, channelling 5 percent of its investments into ETFs. Last year, it raised its equity allocation to 10 percent, despite opposition from some trade unions. ($1 = 66.9250 Indian rupees)

Reporting by Manoj Kumar; Editing by Douglas Busvine