Nod for pension watchdog

Cabinet okays foreclosure law changes; sugarcane msp at Rs 74.5

The Union Cabinet today approved legislation to put in place a pension regulator and amend the law dealing with the recovery of non-performing assets.

In addition, at today's meeting of the Cabinet Committee on Economic Affairs, the minimum price for sugarcane was fixed at Rs 74.5 per quintal for 2005-06 and the base recovery rate was increased by half a percentage point to 9 per cent.

The Cabinet also approved the establishment of the Financial Intelligence Unit India to check money-laundering and related crimes through national and international intelligence.

In addition, agreements with South Africa and Singapore for mutual legal assistance were cleared. The government also decided to launch the National Food for Work Programme on November 14 while the Pradhan Mantri Sadak Yojna is to be launched on December 3.

Bills to constitute the Pension Fund Regulatory and Development Authority and amend the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, are to be introduced in the ensuing winter session of Parliament.

The Cabinet Committee on Political Affairs will decide whether the government would recommend the promulgation of an ordinance or wait for the Bill to be introduced during the winter session, Finance Minister P Chidambaram told reporters after the Cabinet meetings.

The pension legislation would empower the PFRDA to appoint pension fund managers, besides laying down the guidelines on the number of players, prudential norms, investment criteria and the capital requirement.

Sources said the finance ministry's proposal for promulgating an ordinance for a pension regulator met with stiff resistance in the Cabinet meeting with Defence Minister Pranab Mukherjee and Parliamentary Affairs Minister Ghulam Nabi Azad seeking introduction of a Bill. An interim regulator was already in place through an executive order.

Present rules require that an ordinance has to be approved by the Cabinet at least 21 days before the start of a Parliament session. Since the winter session is slated to begin from December 1, today was the last day for the ministry to bring in an ordinance.

The finance ministry had proposed an ordinance for a pension regulator on grounds that the issue has been hanging fire for over 11 months and introducing a Bill in Parliament could delay the appointment if it is referred to a standing committee.

The amendments to the securitisation law have been necessitated after the Supreme Court directed that banks should give borrowers' an opportunity to make a representation before they pass orders and attach properties.

Upholding the constitutional validity of the act after its judgment on Mardia Chemicals' case, the apex court had struck down the provisions under 17(2) of the Act mandating that defaulters have to deposit 75 per cent of the outstanding dues before seeking legal redress.

The proposed amendments are aimed at dissuading borrowers from adopting "dilatory" tactics and enabling creditors to effect speedy recovery, he said.