UPA in Catch-22 as BJP backs move

It is the kind of support the United Progressive Alliance (UPA) would prefer to do without.

It is now likely that if the Pension Fund Regulatory & Development Authority (PFRDA) Bill comes to Parliament, the government's allies, the Left parties, will try to vote it out, while its enemy no 1, the BJP, will come out in full favour of the measure.

"The present pension system is unsustainable. If we don't resolve the situation soon, for the government to keep paying such high rates of interests is not possible. It will result in high cost of capital" BJP leader Arun Jaitely said.

All the BJP-ruled states have supported the interim and final versions of the New Pension System (NPS).

In his speech at the CMs' meet yesterday, Bihar Finance Minister Sushil Modi, who is from the BJP, had said that state governments were finding it hard to bear the burden of pension payouts.

For two-and-a-half years, the UPA government has been aware that it has the option of relying on support from the BJP. But all along, it has been saying that it can't ignore the Left and that the matter should be decided by consensus.

Over this period, the Left has not changed its mind. If anything, its opposition has hardened: It is now opposing the NPS in principle, not merely on the issue of deployment of funds in the stock market.

Under the circumstances, how voting pattern on pension reform will alter political equations on the floor of Parliament and outside remains to be seen.

Earlier, the government was crucially dependent on the Left for financial sector reforms. Once the BJP's support is politically acceptable, it is likely that its untouchability index in the form of parliamentary support for reforms in other sectors like banking and insurance will also come down. This would dilute the government's dependence on the Left.