EPFO's decision to park the money in the stock markets has been questioned by the Finance Ministry. The risk is that in case of growth the funds will go up but when there are losses, they are going to lose out heavily.

In both the cases, the EPFO will not be able to give back the guaranteed return, as the risks are too high. The ministry also said that this is not feasible since a lot of poor people have their hopes pinned down on the fund.

Moreover, unless and until the government assures a minimum return of 15 per cent on the investment, the fund alone is not capable of doing that. Risk is a big factor associated with stocks and PF is not built up with that intention.

Labour minister Mallikarjun Kharge, who is the chairman of the board, said that the EPFO had asked for some clarifications and they were answered duly. When asked about the rate hike, he said that the finance ministry has no objection since at 9.5 per cent the government need not pay anything.