e rit ar et in ndia 14.29
of Rs. 3,000 crore through the fund while it got ETF with diversified CPSE stocks and other
over-subscribed to the tune of Rs. 4,300 crores. Government holdings in the fiscal 2017-18.
This scheme is conceived by the Government
of India as a means to disinvest a part of its holding PenSion Sector reformS
in Public Sector Units (PSUs) and would be
Pension has been the integral part of government
managed by Goldman Sachs Asset Management
jobs in India. Pension serves two important socio-
(India) Pvt. Ltd., a mutual fund company that
economic objectives—
specialises in managing exchange traded funds.
(i) It facilitates the flow of long-term savings
ETF is a security that tracks an index, a
for development, i.e., nation-building;
commodity or a basket of assets such as an index
and
fund, but trades like a stock on an exchange – the
CPSE ETF tracks the CPSE Index (of 10 PSUs (ii) Also helps establish a credible and
included in the ETF). CPSE Index has been sustainable social security system in the
constructed by including companies that meet the country.
following criteria: The New Pension System (NPS) was introduced
(i) Owned 55 per cent or more by the GoI for the new recruits who join government service
and listed on the NSE; on or after 1 January, 2004. Although the NPS
is perhaps one of the cheapest financial products
(ii) Large PSUs (those having more than
available in the country, in order to make it
Rs.1,000 crores as average free float
affordable for the economically disadvantaged,
market capitalisation for six months
the government in September 2010 introduced
period ending June 2013); and
a lower cost version, known as Swavalamban
(iii) With a consistent dividend payment Scheme, which enables groups of people to
record (at least 4 per cent for 7 years join the NPS at a substantially reduced cost. As
immediately prior to or 7 out of 8/9 years per existing scheme under NPS, Swavalamban
immediately prior to June 2013). could be availed either in ‘unorganised sector’ or
The ten blue-chip PSUs which meet the above in ‘NPS Lite’. NPS Lite is a model specifically
criteria and their weightages are: ONGC (26.72 designed to bring NPS within easy reach of the
per cent); GAIL (India) (18.48 per cent); Coal economically disadvantaged sections of the society
India (17.75 per cent); REC (7.16 per cent); Oil —it is extremely affordable and viable due to its
India (7.04 per cent); IOC (6.82 per cent); Power optimised functionalities, available at reduced
Finance Corp. (6.49 per cent); Container Corp. charges. Under the Swavalamban scheme, the
(6.40 per cent); Bharat Electronics (2 per cent) government provides subsidy to each NPS
and Engineers India Ltd. (1.13 per cent). account holder and the scheme has been extended
CPSE ETF will invest the corpus in the until 2016–17.
above-given companies as per the given weightage. A customised version of the core NPS model,
Hence, subject to the tracking error and expenses, known as the NPS Corporate Sector Model was
CPSE ETF’s returns will closely correspond to the introduced from December 2011 to enable
CPSE Index returns. ‘organised-sector’ entities to move their existing
Meanwhile, the Government has announced and prospective employees to the NPS under its
(Union Budget 2017-18 ) to launch a new Corporate Model. All pubic sector banks have