Wednesday, 28 August 2013
Contributory Pension Scheme (CPS)
To woo opposition, govt has prescribed ceiling on FDI in legislation itself
The much-awaited pension reform bill is listed as a legislative business in the Lok Sabha today.
To woo the opposition, the government has already diluted its earlier version in the Pension Fund Development and Regulatory Authority (PFRDA) bill to prescribe the ceiling on foreign direct investment (FDI) in the legislation itself, against the earlier decision to leave it to the executive.
Though the bill capped the FDI ceiling at 26%, it also has a provision to increase it in line with the insurance sector. FDI up to 26% is currently allowed in the private sector insurance. The government is trying to increase it to 49%, but the standing committee had recommended retaining the cap at 26% only.
The pension watchdog--PFRDA is currently an interim body. The bill will give it a statutory status.
The bill was initially introduced in the Lok Sabha in March, 2005. However, the Bill and the official amendments, based on the recommendations of the Standing Committee on Finance, could not be considered by the Lok Sabha, and the Bill lapsed on dissolution of the 14th Lok Sabha.
The PFRDA Bill, 2011 was introduced in the Lok Sabha on the 24th March, 2011 and the present version is just a changed version following Parliament's standing committee report.
courtesy : Business Standard