The bill seeks to provide statutory powers to the pension fund regulator and allow foreign investors to own as much as 26% in pension funds. The bill also allows subscribers to invest in stock market with a cap.
To get the bill through, the government held two rounds of hectic negotiations with principal opposition, the BJP. Finance Minister P Chidambaram and Parliamentary Affairs minister Kamal Nath held discussion with BJP leaders LK Advani, Sushma Swaraj and Arun Jaitley on Wednesday afternoon in Advani’s chamber in parliament house. BJP’s support for the bill is in line with the recommendation of Parliament’s standing committee on finance and the 26% FDI cap incorporated in the pending bill by the Union Cabinet in 2011. The need for discussions arose on Wednesday as the late night meeting between the Prime Minister and the BJP leaders failed to find a solution to end the logjam in Parliament. The BJP on Wednesday morning continued attacking the Prime Minister over the missing coal files with the party demanding that the government reveal why the Prime Minister is not being questioned by the CBI. The BJP also questioned why an FIR has not been lodged till now on the stolen files.
The ice was finally broken after two senior ministers from the government called on BJP veteran Advani and met Opposition leadership. The bill could only be tabled late in the day. Tabling the bill, Chidamabaram said that the government has accepted most of the suggestions by the parliamentary standing committee of finance.
‘The foreign direct investment (FDI) cap in the pension sector will now be linked to that prevailing in the insurance sector. If the insurance Act is amended to allow higher FDI, the same will also be applicable to the pensions sector,’ said Chidambaram.
While some members sought a minimum guaranteed return from pension funds Chidambaram, in his reply, said the regulator PFRDA will notify schemes where assured returns are offered. He, however, pointed out that it is not possible to predict what return can be guaranteed over the next few years.
The left, however, was critical of the bill with CPI leader Gurudas Dasgupta stating that the bill is betrayal by the government to the people. ‘Pension means benefits to the retired people but this is nothing but a fixed deposit for the banks,’ said Dasgupta.