Dear Comrades,
Stumbling once again on its ambitious agenda of key economic reforms,
the UPA government on Thursday deferred the clearance of amendments to
the Pension Fund Regulatory and Development Authority (PRFDA) Bill, 2011
in an Union cabinet meeting.
Once again the pressure of its maverick ally—Trinamool Congress chief Mamata Banerjee—worked on the
government that is already facing charges of policy paralysis from
different quarters.
Three proposed amendments:
The pension bill or the PFRDA Bill suggests changes to how savings of nearly 25 lakh Indians are invested. Currently, these savings are invested in government securities that offer a fixed rate of return. The new bill allows pension funds flexibility on appointing a professional fund management company and lays down roles and responsibilities.
Three proposed amendments:
- The first amendment will reportedly allow contributor to withdraw funds from the pension scheme in case of an emergency.
Also, the subscriber will be reportedly given a minimal assured return for the investment in his fund. - The third amendment reportedly says there will be a 26 per cent cap on the Foreign Direct Investment (FDI) in the scheme. Earlier, the cap was not specified. The BJP has been demanding the FDI cap of 26 per cent to be included in the PFRDA Bill.
The pension bill or the PFRDA Bill suggests changes to how savings of nearly 25 lakh Indians are invested. Currently, these savings are invested in government securities that offer a fixed rate of return. The new bill allows pension funds flexibility on appointing a professional fund management company and lays down roles and responsibilities.
Top sources in the government told HT that railway
minister Mukul Roy shot a letter to Prime Minister Manmohan Singh and
finance minister Pranab Mukherjee on Wednesday evening flagging the
“concerns” of his party chief and West Bengal chief minister Banerjee
over the pension bill.
In December 2011, a similar letter from Mamata Banerjee, then railway
minister, forced the government to drop the item from its cabinet
agenda.
The amendments to the long-pending key reforms bill aims to retain
the cap on foreign direct investment (FDI) at 26%. It allows the
pensioner to demand minimum assured returns and withdraw from his
account.
According to sources, in the cabinet meet, cabinet secretary Ajit
Seth merely said “item number three is deferred” even as some ministers
looked at each other and the finance minister remained silent.
Railway minister Roy's letter mentioned that Banerjee feels the bill
should not be pushed without “a broad-based political consensus”.
Roy’s letter mentioned that the manifesto of the Trinamool Congress
for the 2011 assembly election opposes such reforms that may jeopardize
the interest of common people.
It also pointed out that last year, when the bill was discussed in
the parliamentary standing committee on finance, there was no Trinamool
representative in the panel. (Sudip Bandopadhyay was initially a member
of the standing committee but he left it after becoming the junior
minister for health).
The finance ministry moved to put amendments to the pension bill
after partymen raised a stink over the United Progressive Alliance’s
(UPA) alleged policy paralysis at the Congress working committee meeting
on Monday.
The UPA — especially after the downgrading of India’s credit ratings
and the nine-year low gross domestic product growth rate — revived the
cabinet note prepared in February.
The Pension Fund Regulatory and Development Authority (PRFDA) Bill,
2011, had been stuck in Parliament since last year, even as the BJP has
offered its support to the bill.
http://www.hindustantimes.com/business-news/WorldEconomy/Pension-bill-deferred-over-difference-of-views/Article1-867226.aspx
