<div>The government is aiming for an 8-10 per cent annual economic growth through supply-side measures to increase the capacity of Asia's third-largest economy rather than risk higher inflation by stimulating demand, Jayant Sinha, the Minister of State for Finance, said.</div><div> </div><div>Sinha, a former McKinsey consultant, said on Thursday that the government had ramped up public investment by 40 per cent this year, as part of Prime Minister Narendra Modi's push to modernise road and railways.</div><div> </div><div><strong>Equity Markets</strong></div><div>Sinha also said the government is aiming to stabilise domestic equity markets by allowing greater investment by pension funds, which are typically long-term investors.</div><div> </div><div><div>India plans to lift the cap on equity investments made by the Employees Provident Fund Organisation (EPFO), the main state provident fund, to 15 per cent from 5 per cent, the junior finance minister said.</div><div> </div><div>Jayant Sinha told a business conference that the government is aiming to stabilise domestic equity markets by allowing greater investment by pension funds, which are typically long-term investors.</div><div> </div><div>The EPFO manages $100 billion in savings that are now mainly invested in government bonds paying a fixed rate of interest.</div><div> </div><div>Last week, the regulator of another, smaller, state pension fund said the government may raise its cap on equity investments on behalf of government workers to 50 per cent of assets under management.</div><div> </div><div>The sums involved are small in relation to the $1.5 trillion market value of the Bombay Stock Exchange, but could grow quickly as Modi seeks to broaden India's tiny pensions net to cover more workers.</div></div>
