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Government confirms no plans to divert ₹16,600 Cr in unclaimed LIC and EPFO funds

Parliament clarification puts to rest speculation that idle policyholder and provident fund balances could be routed to state budgets or infrastructure spending.

₹16,600 CrTotal unclaimed LIC + EPFO funds

FINSAMUDRA DESK · 22 Jul 2026, 5:15 pm IST · 1 MIN

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₹7,318 CrLIC unclaimed pool

₹9,330 CrEPFO inoperative accounts

There is over ₹16,600 crore sitting idle in forgotten LIC policies and inoperative EPF accounts. The government just shut down rumors about using it. — Image: Finsamudra LinkedIn archive

The Ministry of Finance has formally clarified in Parliament that there is zero proposal to divert unclaimed LIC or EPFO funds for other government expenditures, addressing recurring speculation about the fate of India's forgotten wealth.

The numbers are significant: LIC's unclaimed pool stands at ₹7,318 crore, covering policyholder dues and accrued interest. EPFO's inoperative accounts — those with no fresh contributions — hold ₹9,330 crore. Together, that is over ₹16,600 crore sitting untouched.

The government's position is unambiguous: these funds belong strictly to citizens and their legal heirs, not to general government coffers.

Under existing rules, unclaimed insurance funds untouched for over 10 years move into the Senior Citizen Welfare Fund (SCWF), but this is a custodial shift only — beneficiaries retain the legal right to claim these amounts at any point.

On the process side, EPFO is piloting an automation fix: small inoperative balances under ₹1,000 will be auto-settled directly into Aadhaar-linked bank accounts, removing the need for manual claims.

Government confirms no plans to divert ₹16,600 Cr in unclaimed LIC and EPFO funds

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