Pension Bill: Govt meets Left halfway

Govt agrees to guaranteed returns if staff pay more premium; CITU stonewalls proposal.

Keen to push through the pension Bill in the current session of Parliament, the UPA government is ready to concede to the Left parties' demand for guaranteed returns on pension funds provided government employees pay more premium.

On the banking Bill, the government is ready to bar foreign banks from taking over Indian private banks, to address the Left's apprehension on the removal of 10 per cent cap on voting rights.

In that case, the government would like its allies to allow Indian banks and industrialists to take over private banks.

Despite these fresh proposals, made by Finance Minister P Chidambaram on Friday, the two Bills do not find favour with the trade unions and non-CPI(M) Left parties.

After the Friday's meeting with government interlocutors including Chidambaram and External Affairs Minister Pranab Mukherjee, CPI(M) Politburo member Sitaram Yechury said his party would consult its trade union wing, CITU, and get back to the government this week.

CITU President MK Pandhe, however, said the new proposals were not acceptable to them. "We have consulted central and states' employees. They are against increased premium," he said.

On the banking Bill, he said, "We are against concentration of capital through takeover of small private banks by big ones. Besides, what is the guarantee that such Indian banks will not collaborate with foreign banks in the future?

The government proposes to drop the clause on foreign banks but the intention is to bring them on board in the future."

The CITU is also opposed to other proposals, including entrusting pension funds with public managers for three years and involving private players after that.

"We remain opposed to the privatisation of pension funds. We are also opposed to the idea of public fund managers because they will invest the funds in stock markets sooner or later," said Pandhe.

Although the government says that the public funds managers will invest in government securities for three years, the trade unions are not ready to accept the bait.

The CPI(M), however, has no problem with the stock market as long as the government is there to bail out the employees.

The fate of the two bills now hinges on the CPI(M) leadership's ability to convince the trade unions and other Left partners.