Trade union leaders and the central provident fund commissioner have come together to debunk the voluntary pension scheme run by private fund managers. The scheme, mooted by the Insurance Regulatory Development Authority (Irda), was described as a way of providing cheap capital to corporate houses under the guise of social security for unorganised labour.
The discussion at a workshop on social security for the unorganised sector at the V V Giri National Labour Institute took a curious turn when Irda member H O Sonig referred to the pension scheme on which a presentation has been made before the group of ministers on labour reforms headed by K C Pant.
Even the group of ministers was divided on the scheme, and the then Union labour minister Sharad Yadav had to reject it. Central provident fund commissioner Ajai Singh repeated his ministry's viewpoint this time around as well. The finance ministry is, however, believed to be pushing the scheme.
Union labour minister Sahib Singh Verma, who was supposed to inaugurate the workshop, could not make it to the venue. Minister of state for labour Ashok Pradhan was present instead.
The director of the institute, Uday Kumar Varma, set the tone for the workshop by highlighting the sinister implications of leaving a huge workforce out of the security cover.
Sonig said the group of ministers would soon discuss the modalities to be worked out for the implementation of the scheme which envisaged creating private fund managers to be regulated by a regulatory authority.
At the meeting of the group of ministers, Sonig had said various government agencies like banks, post offices, non-governmental organisations and affinity groups could be involved to collect voluntary contribution from workers, and allow the fund to be managed by private agencies authorised by the government. "The regulatory authority could be Irda or any other agency," he said, adding such pension schemes had proved highly successful in Chile.
However, Sonig's argument was strongly rebutted by Singh who said the model was not feasible in a vast country like India. "This will only give private fund managers a chance to go cherry-picking," he said, apprehending that the private fund managers would not bother about migratory workers at construction sites and the mobile work force that the unorganised sector represented.
He particularly referred to the "unpleasant experience of regulators" in checking unethical practices. The competition among private fund managers would give rise to "unethical practices" witnessed in recent scams, Singh added.
Significantly, Singh was applauded by all trade union representatives of INTUC, Citu, HMS and BMS, who described the scheme as an attempt to provide cheap capital for corporate houses on the pretext of covering workers of the unorganised sector.
