Lok Sabha has passed a bill to amend the “archaic” Indian Trusts Act, 1882, that will provide greater autonomy to trustees and allow them to invest trust funds in securities notified by the government. The Indian Trusts (Amendment) Bill, 2015, was passed by a voice vote amid continued protests by the Congress members. Moving the bill for passage, Minister of State for Finance Jayant Sinha said the 1882 Act was a “relic of the colonial past”. Sections 20 and 20A needed to be amended to allow trustees to invest trust funds in securities and bonds notified by the government, he said.

• Section 20 deals with the investment of trust money and restricts the trustees to investing only in the prescribed securities, including promissory notes, debentures, stock or other securities of any state government or central government or of the United Kingdom of Britain and Ireland.
• Section 20A lists the limits of the power of the trustee to purchase redeemable stock at a premium.

The Minister said the Bill would give greater autonomy and flexibility to trustees in deciding on investment on trust money. In December 2014, Cabinet had approved the amendments to enable the central government to notify securities or class of securities for investment by trusts.