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The SEBI Chairman, Mr U. K. Sinha, has called for implementation of pension reforms. Speaking at the Skoch summit in Mumbai, he said: “It has been a decade and yet they have not come through. How long can we defer this?”
Mr Sinha pointed out that passing the PFRDA Bill was not the end. “In my view, it will serve a purpose — a limited purpose. The largest pension funds in the country, which have been managed under the central law, are they being reformed?” he asked.
To bring liquidity into the equity market, Mr Sinha highlighted the need for money coming through the pension fund route.
He gave the example of the Employees' Provident Fund Organisation, which had about 40 million accounts adding to about Rs 200,000 crore. “Even if even a small portion of this money comes into the market, it would be good,” he said.
Mr Sinha ruled out extending the deadline for companies to achieve the minimum public shareholding of 25 per cent. “Where is the question of extension coming from? The time-frame given was three years and, even then, for some reason, people have not come out. As far as SEBI is concerned, we have provided more avenues to them so that they can meet that requirement.”
The deadline for companies is June 2013. SEBI is also looking at simplifying the offer-for-sale process for promoters to divest stake directly through the stock exchanges. “It is true that we have received inputs on offer for sale,” said Mr Sinha. “It can be made simple. SEBI is examining this.”
FDI in retail, insurance
PTI reports
Mr Sinha said the country has still time to tide over the present growth deceleration if “we move ahead with some of the urgent reform measures” and resolve the issues plaguing the implementation side.
Listing out the reform steps that are needed urgently, Mr Sinha said, “We all know what happened to FDI in retail, the PFRDA Bill, and the pension reforms are yet another examples.
On the insurance front, he said the proportion of foreign investments is not increasing.
Last week the government had decided against increasing the FDI cap in the insurance sector from 26 per cent.
“If we start making some progress on these things (reforms), then in spite of the forecast about our economy coming down from the higher levels of 2007-08; if these policies change ... start happening, we can again come to levels which are commendable in comparison to any part of the world. (But) those changes have to take place,” he said.
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