1. EPFO: UID proposal =cancelled
  2. EPFO : AAA bonds proposal = pending
  3. EPFO: Air India=invested
  4. Mock Questions

EPFO: UID proposal =cancelled

  • Earlier EPFO had decided that Aadhaar numbers must be compulsory for subscribers from 1st March 2013.
  • This could help EPFO easily cross verify subscribers.

But after EPFO officials held meeting with UIDAI officials, they came to know that

  1. UIDAI agency is organizing enrollment camps in only 18 states.
  2. In the remaining states, the Registrar General of India (RGI) is collecting data for the National Population Register (NPR). And then data is sent to UIDAI then UIDAI issues Aadhar card = time consuming.

Ok so what’s the difference?

Aadhar card

National Population register (NPR)

Under UIDAI, Planning Commission. Under Registrar general of India, Home ministry.
Voluntary. Compulsory for all Indian residents.
Every resident’s fingerprint and iris needs to be scanned.
If there are discrepancies between UIDAI data and NPR data, NPR will prevail.
  1. They setup their offices/camps at various places.
  2. Any person / family can come in, show documents and give biometric data and get Aadhaar card.
  1. Officials manually visit every house. (just like how CENSUS is conducted) and check documents, collect biometric data. (for NPR)
  2. They send this data to UIDAI.
  3. Then UIDAI generates the Aadhar number= very time consuming.

Hence EPFO has decide to delay this “compulsory Aadhar number” rule. (because it is very unlikely that entire India will be covered under Aadhar numbers by March 2013).

By the way, why this Double labour (by UIDAI and RGI)?
Because there is a “turf-war” going on between UIDAI and Home Ministry. Home ministry has two problems with data Collected by UIDAI:

  1. it is not secure
  2. Data / family is not verified by a government servant.

EPFO : AAA bonds proposal = pending

At present, EPFO can invest in only bonds issued by PSUs and seven private companies and banks viz.

  1. HDFC
  2. IDFC
  3. IL&FS (Infrastructure Leasing & Financial Services Limited)
  4. LIC Housing Finance
  5. HDFC Bank
  6. ICICI Bank
  7. Axis Bank


EPFO @CRISIL Yaar please give some investment advice.
CRISIL I suggest you invest some money in Corporate bonds with “AAA” rating.
  • Because “AAA” rating= means company is reputed. It’ll not default on the payments (unlike Pawnfisher).
  • And they offer good rate of return. For example RELIANCE Industries, Tata etc. They offer good interest rate too and quicker installments (compared to Air India).
  • You’ve total fund of Rs.3.5 lakh crores, it’d be a good idea if you invest 10% of it (=Rs.35000 crores) into Corporate Bonds.
EPFO Sounds like a good idea, but I’ll have to get this proposal approved by Central Board of Trustees (CBT). (in Feb-end 2013)
EPFO Because CBT is  the main Decision Making body of EPFO.

If this proposal is approved, it can mean two things

  1. EPFO can earn more money on its investment= it can offer higher returns to its subscribers.
  2. Those corporates companies get more investment money (from EPFO)= they can new plants/ machinery / employees and expand their production capacity =better IIP, better GDP.

EPFO: Air India=invested

December 2012

Air India I need to borrow cash from market, just to repay some previous bank loans. So, In way I’m totally awesome Pawnfisher airlines!
LIC and EPFO Then you should be left to collapse just like Pawnfisher.
Air India Oh come on!! I’m the “National” Airline of India. You must not let me collapse!
LIC and EPFO Oh the patriotism angle. In that case, we must not apply the basic principles of free market economy hahaha!
Please tell us how much cash do you need?
Air India Rs.7400 crores.I’ll issue bonds.
Maturity @19 years. (meaning you’ll recover principle after 19 years.)
In the mean time, I’ll pay 9+% interest rate (but I’ll pay installments bi-annually.)
LIC and EPFO Ok agreed. We’ll buy all of your bonds.

By the way, in case you wondered: If Air India=#EPICFAIL, then why did LIC+EPFO take risk?

Ans. Because Government of India (GoI) gave unconditional guarantee, “if Air India fails to make the payment on these bonds, we will pay money (to bond holders).”

  • And due to this assurance (by GoI), Air India’s bond was given “AAA” rating. (Despite the fact that Air India’s financial situation is not very sound).
  • Anyways, If Air India collapses, the bond payment will be done by Government of India (=from the pockets of Indian Tax payers.)

Mock Questions

Q1. Correct Statement

  1. UIDAI comes under planning commission.
  2. Registrar General of India functions under Ministry of Statistics and program implementation.
  1. Only 1
  2. Only 2
  3. Both
  4. None

Q2. Incorrect Statement

  1. It is mandatory for every Indian resident to get himself registered in NPR.
  2. It is mandatory for every Indian resident to get himself an Aadhar card.
  1. Only 1
  2. Only 2
  3. Both
  4. None

Q3. For the improvement of IIP:

  1. LIC, PFRDA and EPFO should invest only in G-sec (Government securities).
  2. LIC, PFRDA and EPFO should invest “AA” or “AAA” rated Indian corporate bonds.
  3. LIC, PFRDA and EPFO should invest in foreign bonds with “D” rating.
  4. None of above.


  1. UIDAI is a flawed idea. Agree/Disagree, why?
  2. NPR is a flawed idea. Agree/Disagree, why?
  3. Government should save Air India. Agree/Disagree, why?
  4. Government should save Kingfisher. Agree/Disagree, why?
  5. The trend of LIC/EPFO investing money in PSUs (or financing Government’s disinvestment targets) breeds inefficiency. Agree/Disagree, why?
  6. LIC, EPFO, PFRDA should look @ larger national interest and not just maximum profit to their subscribers. Agree/disagree. Why?