Friday, June 8, 2012

Pension bill deferred, not discussed in cabinet


Pension bill deferred, not discussed in cabinet

The Pension Bill, which was expected to be discussed in the cabinet meet today, has been deferred. The bill, awaiting clearance on three amendments, was not brought before the cabinet today.
The bill has been stalled for years as political parties squabble over its provisions. UPA's biggest challenge is to bring around its partner Trinamool Congress, which has been dead opposed to the legislation. To pass the Bill in Parliament the government needs numbers and the likely loss of support of the Trinamool's all important 19 MPs in the Lok Sabha have stalled the government mid-step many a time.

The three changes proposed are - to allow a contributor to the pension scheme to withdraw funds in case of an emergency. To give subscribers a minimum assured return on investment and to provide a cap of 26% on foreign direct investment in the scheme. 
The Bill, also called the Pension Fund Regulatory and Development Authority Bill, allows pension funds the flexibility to appoint a professional fund management company. Currently, these savings are invested in government securities that offer a fixed rate of return. The changes will affect how savings of nearly 25 lakh Indians are invested.

Also, under the National Pension System (NPS), every subscriber will have an individual pension account, which he can port with a job change. Every government employee hired since 2004 is covered by the NPS and it is voluntary for all other citizens since 2009 including the unorganized sector.

The Bill has repeatedly run into rough weather, with primarily the Left parties, apart from the Trinamool Congress, opposed to it. The BJP wanted the FDI cap of 26 per cent to be included in the PFRDA Bill. The government is said to have finally sewn up the support of the main Opposition party in the last Winter session by agreeing to the amendments it sought.

But, say sources, in the season of new friendships, the UPA government might not be holding its breath this once. The Congress' growing closeness to the Samajwadi Party could ensure that Mulayam Singh Yadav and his 21 MPs will be by the UPA's side on the Pension Bill. The Samajwadi Party chief has so far ruled out any formal equation with the Congress-led alliance that rules at the Centre, but has bailed out the government a number of times on important issues and Bills in Parliament. At a recent dinner to celebrate the UPA's three years in governance, Mr Yadav got higher billing than official UPA allies - he was seated prominently on the dais and then at Congress president Sonia Gandhi's table for dinner. 
Source : NDTV

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