Mamata, Left, SP all opposed; BJP wants two important amendments in government draft.
The UPA government may have bought peace for now by putting the contentious decision of foreign direct investment in multi-brand retail on hold and hopefully getting Parliament on track. However, the Pension Fund Regulatory Development Authority bill, which it is keen to have passed in this session, is likely to again see the legislature divided on political lines.
Touted as ushering in much needed reform, it has been staunchly opposed by the Left parties, the Samajwadi Party and the troublesome Trinamool Congress ally. The Bharatiya Janata Party may agree to support it, but subject to several amendments.
The bill seeks to make PFRDA a statutory authority, with regulatory powers. It also allows for foreign investment in the sector through joint ventures. It was first introduced in the Lok Sabha in 2004, but the Left parties’ trenchant opposition prevented UPA-I from taking it forward. In UPA-II, although not shackled by the Left as allies, there is another formidable opposition in TMC chief Mamata Banerjee.
She has gone on record to say that she opposes both, FDI in retail and the PFRDA bill. Her summary: “We don't support the pension bill. I have reservations and we'll express our views when it comes to us in detail. In a lifetime, an employee keeps some money for the future for pension, gratuity and provident fund. That should not be destroyed.”
That she can be a major stumbling block for the UPA is amply clear after what happened with FDI in retail. Despite Prime Minister Manmohan Singh gunning for the move, the government seems to have had to put it on hold due to the TMC’s opposition.
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Getting the numbers right to garner support for the PFRDA bill is crucial, as this is classified as a ‘money bill’, meaning lack of majority support for it translates into lack of support for the government, too.
The BJP, the main opposition party, is not too happy with the present version of the bill, which does not incorporate two important recommendations made by the standing committee which examined it, headed by BJP leader and former finance minister Yashwant Sinha. These were to fixing a minimum return on investment by subscribers to pension schemes and specifying a cap on foreign investment in the sector, such as 26 per cent. The BJP is not opposed to the bill but is insistent on inclusion of these two amendments.
The Samajwadi Party is also opposed. Party general secretary Mohan Singh said, “We are completely opposed. These foreign companies will enter and run away with the hard-earned pension of our people. At least, Indian private companies like Reliance, Tata are our own corporates, they have their assets here, they cannot run away. We are not opposed to private players but to foreign companies.”
That the UPA floor managers have a tough task on their hands is evident with so much of divide across the political spectrum. They have to ensure pension reform does not go the FDI-in-retail way.