Saturday, January 29 2005 20:39 Hrs (IST) - World Time -

New Delhi: The Government said today (Jan 29, 2005) it was not mandatory for non-Government provident funds, superannuation and gratuity funds to invest five per cent of their assets in equity of blue-chip companies.

Although Government relaxed norms to allow private provident funds to invest up to five per cent of their corpus in equity, an official release said, "This is only an enabling provision and only an additional window for investment has been opened."

The Government also clarified that public provident fund is not covered under the description of non-Government PFs and hence the new investment norms do not apply to them.

Only non-Government provident funds, superannuation and gratuity funds are allowed to invest up to five per cent of their assets in blue-chip shares and 10 per cent in corporate debts and equity-oriented mutual funds from April 2005.

The Government has relaxed the norms to give PFs a wider avenue for investments.

The move to allow PFs to invest in equities is expected to boost the equities market, which sees over Rs 1,500 crore inflow of long term savings in the capital market.