Renewed pressure from the Trinamool Congress, a crucial ally of the UPA, had made the government freeze the Pension Fund Regulatory and Development Authority (PFRDA) Bill. Given the acute shortage of time, it is unlikely the Winter session of Parliament will see its passage.
The Bill envisages an authority to promote old-age income security by establishing, developing and regulating pension funds, to protect the interest of subscribers of pension funds. Traditionally, the Budget session (that starts at the end of February) sees little legislative business.
The Trinamool Congress (TMC) chief and West Bengal Chief Minister Mamata Banerjee is learnt to have written to the government expressing her reservations. In Kolkata, senior TMC leaders said the party’s Lok Sabha manifesto (2009) stated the party was opposed to FDIs in retail, banking, insurance and pension sectors. “We don’t want pensioners to expose their life savings to volatile market conditions. We favour fixed returns on pension,” a minister in the West Bengal government said.
Minister of State for Health Sudeep Bandyopadhyay, who handed over Banerjee’s letter to Finance Minister Pranab Mukherjee last evening, said he was not sure what the letter from the Chief Minister said. But, he asked: “Tell me if a decision that has been opposed by the TMC has been taken by the UPA?”
Two days ago, Mukherjee had agreed to take TMC’s anxieties on board by offering an option in the draft Bill. Aware that he would not be able to pass the Bill unless there was support from the allies of the UPA, he included a clause to the effect that pensioners would have an option of a fixed return via investment in government securities; or, if they had an appetite for risk, investment in any proportion they wanted in the equities market.
This is not acceptable to the TMC, which wants “security” for pensioners. Banerjee said she is in favour of a return to the pre-2004 pension system, wherein employees would get 50 per cent of the last drawn pay.