Govt wins over BJP on pension bill

Govt wins over BJP on pension bill

NEW DELHI: UPA's reforms agenda received a much-needed boost with finance minister P Chidambaram and BJP leaders agreeing on a 26% cap on FDI in the pension sector paving the way for the pension bill's passage in the monsoon session of Parliament.

A breakthrough in the logjam is in sight with Chidambaram informing BJP leaders that the Pension Fund Regulatory and Development Authority Bill will incorporate the 26% FDI cap in pension fund management companies. This is in line with the recommendation of Parliament's standing committee on finance and the 26% FDI cap incorporated in the pending Bill by the Union Cabinet in 2011.

The interim Authority came into being in 2003, but legislation has been pending since with protracted negotiations between the government and BJP failing to yield a consensus as the atmospherics were often vitiated by intense politicking.

But while an agreement on the pension bill was reached at a meeting between Chidambaram and BJP leaders Sushma Swaraj, Arun Jaitley and Yashwant Sinha on Saturday, there is no progress on the bill to enhance FDI in insurance.

Chidambaram's effort to convince BJP leaders to sign up to 49% FDI in insurance did not succeed as the Opposition insisted on a 26% cap as recommended by the finance standing committee headed by Sinha.

In a recent interview to TOI, Chidambaram said the pension bill can be passed first and that he would request the Opposition to pass it in the monsoon session. "On the insurance bill, the only clause on which they have to give me their final view — they have not rejected it — is whether they agree to raise the cap from 26% to 49%," Chidambaram had said.

A former finance minister, Sinha's is an influential voice in framing BJP's approach to finance and economic legislation and the leader has maintained that the committee's recommendation enjoy widespread bipartisan support.

Leaders of Opposition in Lok Sabha and Rajya Sabha Sushma Swaraj and Arun Jaitley have also strongly argued that the finance standing committee's recommendations be treated as the benchmark for both pension and insurance sectors.

Sealing a deal with BJP on the pension bill is a hard won achievement for the government as it indicates the monsoon session of Parliament, beginning Monday, may not be a total washout as has been apprehended.

Though regional issues like statehood demands in the light of Congress's decision to back Telangana are bound to disrupt proceedings, the main Opposition seems to be in the mood to allow business in Parliament.