Left open to UPA's pension Bill proposal

The UPA government and the Left parties today moved closer to an agreement on the Pension Fund Regulatory & Development Authority (PFRDA) Bill.

The Left agreed to consider Finance Minister P Chidambaram's proposal to let public fund managers look after pension funds and invest them in the public sector for three years.

The proposal, mooted at the UPA-Left coordination committee meeting today, was a climb down for the government as the Bill was conceived to privatise pension funds and allow then to invest in the stock market. The Left will give its response in the next coordination committee meeting expected in the second week of November.

On pension Bill as well as the Banking Regulation (Amendment) Bill, the Left wanted the government to talk with the trade unions.

However, the deadlock over the banking Bill remained with the Left continuing to oppose lifting of the 10 per cent cap on voting rights of foreign banks.

On disinvestment, the government said it wanted to sell small portions to fund social sector schemes and there was no plan to privatise PSUs. The Left parties said they would respond on this in the next meeting. They also sought another meeting to discuss the issue of special economic zones.

Chidambaram rejected most proposals made in the Left's note on macroeconomic policies, resource mobilisation and financial sector liberalisation. He turned down the Left's demand for long-term capital gains tax and brushed aside the proposal for more taxes and regulations for FIIs.

He also rejected the proposal for imposition of inheritance tax, saying under the Hindu Succession Act, in Hindu undivided families, inheritance went to male heirs.

On wealth tax, he said several assets were already being taxed and other items proposed by the Left could be considered. The Left rejected the government's proposal for raising the FDI limit in the insurance sector.

Chidambaram, while rejecting these proposals for resource mobilisation, said India's tax revenue had gone up by 20 per cent, which was a good sign for any country.

The two sides agreed to bring the Women's Reservation Bill in its present form in the next session of Parliament. On this, UPA Chairperson Sonia Gandhi was learnt to have sided with the Left, ignoring Home Minister Shivraj Patil's plea that the Bill could wait till the delimitation of constituencies was over.

Besides Chidambaram and Gandhi, the meeting was attended by Prime Minister Manmohan Singh, Defence Minister Pranab Mukherjee, CPI(M) leaders Prakash Karat and Sitaram Yechury, CPI leaders AB Bardhan and D Raja, and RSP leader Abani Roy.