Seeking better returns on surplus funds, the government on Sunday allowed the Employees State Insurance Company (ESIC) to invest 15% of its surplus funds in stocks via an exchange-traded fund (ETF).

The decision was taken at an ESIC meeting chaired by Union Labour Minister Bhupender Yadav at the company’s headquarters in New Delhi.

A statement from the Labour Ministry said the decision to invest surplus funds in equity was due to the low rate of return on debt instruments and the need to diversify the company’s portfolio. Initially, investing will be limited to exchange-traded funds.

“Initial investment should start at 5% and gradually increase to 15% after two-quarters of review. The investment will be limited to ETFs, i.e., Nifty50 and Sensex. Managed by fund managers from asset management companies.) Equity Investments It will be overseen by the existing custodian, external part-time auditors and consultants who will manage debt investments and equity ETFs.”

In addition, the Minister also emphasised strengthening the infrastructure of ESIC hospitals and pharmacies and approved the establishment of a new 100-bed ESIC hospital in Shyamlibazar, Agartala, Tripura and Idukki.

Furthermore, it has been decided to carry out the capital works of ESIC through Central/State PSUs in addition to the Central Public Works Department (CPWD). ESIC will invite new appointments from such Central/State PSUs in due course.