The Employees’ Provident Fund Organisation (EPFO) has reported a significant increase in its investible corpus, which has more than doubled over the past five years, reaching an impressive ₹24.75 trillion. This remarkable growth can be attributed to various factors, including an increase in active subscribers and strategic investment decisions.
Growth in Subscribers
The number of active contributing subscribers has also seen a substantial rise, growing by 7.6% to 73.7 million in the fiscal year 2024, compared to 68.5 million in the previous year. This increase reflects the growing awareness and participation of employees in the EPF scheme, which is designed to provide financial security for workers post-retirement.
Investment Strategy
The EPFO’s investment strategy has played a crucial role in this growth. The organization has been diversifying its investment portfolio, focusing on long-term gains while ensuring the safety of funds. The EPFO invests primarily in government securities and bonds, which offer stable returns, thereby enhancing its overall corpus.
Factors Contributing to the Growth
Increased Subscriber Base: The growth in the number of active subscribers has been a key driver for the EPFO’s expanding corpus. More individuals contributing to the fund directly translates into a larger pool of resources available for investment.
Investment Strategies: The EPFO has diversified its investment strategies, including a substantial investment of ₹34,208 crore in Exchange-Traded Funds (ETFs) during the first half of FY24 (April to October) to enhance returns for its members.
Economic Growth and Employment: The overall economic environment and government initiatives aimed at boosting formal employment have also played a role in increasing contributions to the EPFO.
Future Outlook
Looking ahead, the EPFO aims to continue this upward trajectory by encouraging more employees to contribute and by exploring new investment avenues that align with market trends. The organization is also expected to maintain its competitive interest rates, which currently stand at 8.25%, further incentivizing contributions from employees.
This doubling of the investible corpus not only strengthens the financial foundation of the EPFO but also enhances the retirement savings of millions of Indian workers, ensuring a more secure future for them and their families.
