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The Pension Bill may get another roadblock as the Bhartiya Janata Party has insisted that it will support the Bill only when key suggestions of standing committee are incorporated.
The Bill is listed for consideration and passage during the ongoing session of the Parliament. This session will end on May 22.
A person familiar with the development told Business Line , “the BJP wants standing committee's recommendation on minimum assured returns and foreign direct investment cap to be included in the Bill before it is brought for consideration and passage.”
The Standing Committee on Finance is headed by the BJP leader, Mr Yashwant Sinha.
Though a source hoped that these recommendations will be included in the final Bill, there is a technical problem.
The committee gave its report last August. Following this, on November 17, 2011, the Union Cabinet approved the revised Bill sans the committee's recommendation on assured return and FDI cap.
The Government is not bound to accept the committee's recommendations, but in the absence of required numbers in both Houses for passage of Bill, it might succumb to the Opposition's demand.
In such a situation, if the Finance Ministry wants to incorporate the demand, it will have to approach the Cabinet again. This is a time consuming process, the source added.
The committee in its report said, “The Government must devise a mechanism to enable subscribers of NPS to be ensured of such a minimum assured/guaranteed returns for their pensions so that they are not put to any disadvantage vis-à-vis other pensioners.
minimum rate of return
The Committee would recommend that the minimum rate of return on the contributions to the pension fund of the employee should not be less than the rate of interest on the Employees Provident Fund Scheme.”
FDI cap
Regarding the FDI cap, the committee explained that spelling out the foreign investment policy in the pension sector clearly in the provisions of the Pension Bill will be more in the fitness of things, as the pension fund managers holding the stake of the old age income security of their clients cannot be compared with other agencies/companies/institutions in the financial sector.
The Pension Fund Regulatory and Development Authority Bill, 2011 (PFRDA Bill, 2011) was introduced in Lok Sabha on March 24, 2011 and then referred to the Standing Committee. The bill lapsed during the first term of the UPA.
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