TMC torpedoes pension bill, again

A day after Prime Minister Manmohan Singh sent strong signals that the UPA government was committed to get India’s economy back on track through reforms, the Cabinet on Thursday deferred a bill seeking to open the country’s pension sector to private and foreign players, under pressure from ally Trinamool Congress yet again.

The Pension Fund Regulatory and Development Authority Bill, 2011, was put off without consideration. According to sources, Cabinet Secretary Ajit Seth told the meeting that the bill was “dropped” when its turn came and moved on to another bill.

It is for the second time after December 2011 that TMC got the bill deferred. Railway Minister Mukul Roy reportedly wrote to the Prime Minister and Finance Minister Pranab Mukherjee on Wednesday, stating that a broad-based political consensus was needed to push the bill through.

Roy also contended that the parliamentary standing committee on finance, which okayed the bill, has no TMC representative has no representative to articulate the party’s views.
In December last year, TMC opposed the bill, contending that the government did not specify the minimum return assured to those who invested in pension schemes.

The amended bill, however, allows pensioners to demand minimum assured returns and make withdrawals from their account. It also aims to retain the cap on foreign direct investment (FDI) in the sector at 26 per cent.

Ironically, the bill was supported by Opposition BJP, which has indicated that the party will not oppose the bill’s passage in Parliament.

However, analysts said the Congress, which is pitching for Vice-president Hamid Ansari and Finance Minister Pranab Mukherjee as UPA’s possible candidates in the Presidential poll, badly needs TMC’s support which has 48,000 votes in the electoral college. The BJP has ruled out supporting either Mukherjee or Ansari.

The PFRDA Bill is one of three important financial sector reform legislations. The two others are the insurance bill and the banking reforms bill. The Cabinet has approved the banking bill, which seeks to raise voting rights of shareholders in private sector banks from 10 per cent to 26 per cent, but is yet to be introduced in Parliament.

In another major decision, the Cabinet approved infusion of Rs 632-crore capital in cash-starved regional rural banks to improve their capital adequacy and lending capacity to the farm sector.

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