Financial Daily from THE HINDU group of publications
Tuesday, Mar 22, 2005
Money & Banking
Government - Financial Policy
Pension Bill tabled; Left stages walkout
New Delhi , March 21
THE Government's efforts to bring about a statutory regulatory mechanism for the new pension system (NPS) appear to be running into rough weather, with the Left parties walking out of the Lok Sabha over the introduction of the Pension Fund Regulatory and Development Authority (PFRDA) Bill, 2005.
The Bill, introduced by the Finance Minister, Mr P. Chidambaram, proposes to replace the Ordinance promulgated in December 2004 for setting up the PFRDA.
Members of the Left parties, on whom the Government depends for majority in the Lower House, even went to the extent of suggesting that they would vote against the Bill. "We will vote against it," the CPI MP, Mr Gurudas Dasgupta, said, mentioning that the Bill was against the spirit of the UPA Government's common minimum programme.
Mr V. Radhakrishnan of the CPI(M) questioned the Government's urgency in promulgating an ordinance since the NPS was already in operation from January 1, 2004, through a notification.
Joining Mr Radhakrishnan in voicing his opposition to the Bill was another senior party colleague, Mr Basudeb Acharya, who felt that the Bill would affect the interest of employees. Mr V.K. Malhotra, Deputy leader, BJP, also criticised the Government for coming out with ordinances.
The Finance Minister, however, assured the House that the apprehensions of members would be allayed during the debate on the Bill.
The Government has pointed out in the Bill that an early legislative mandate for PFRDA was necessary as the NPS was already in place without the full architecture and a statutory regulatory mechanism. He pointed out that more than 40,000 new Central government employees are already covered by the NPS since last January, and it had become necessary to replace the interim arrangement with a regulatory framework to avoid future complications.
The NPS is mandatory for new recruits to the Central government services (except to armed forces in the first stage) who have joined on or after January 1, 2004.
The Government also said that seven State governments Andhra Pradesh, Chhattisgarh, Himachal Pradesh, Jharkhand, Manipur, Rajasthan and Tamil Nadu have already notified and introduced defined contribution pension scheme for their employees. A few others are interested in joining the NPS when its architecture and mechanism are ready.
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