By IRL Correspondent
NEW DELHI: The business newspapers of the country as well as the mainline dailies may have gone hammer and tongue at the Trinamool Congress and its leader Mamata Banerjee for postponing the discussion on the Pension Bill at the union cabinet meeting on June 7, but for the lakhs of pensioners, this is not a bad news as their hard earned pension funds are still not at the mercy of the volatile stock market. The central trade unions have all along opposed the provisions of the Pension Fund Regulatory and Development Authority Bill (PFRDA) as many of the provisions are totally against the interests of the pensioners whose hard earned money are lying in these funds. At a time when the market is so unstable and the economy is sinking, how can the Government think of bringing such a bill ignoring the interests of the pensioners?
On June 6, the prime minister had presided over a meeting of ministers in charge of infrastructure sectors and had announced a number of big-ticket projects in an attempt to dispel the widespread perception of policy paralysis.
The government had hoped to get the Pension Fund Regulatory and Development Authority Bill, which seeks to give legal sanction to the interim pension regulator that was set up by way of an executive order in 2003, passed in the monsoon session of Parliament. But the government’s leadership refrained from taking a decision after the Trinamool Congress expressed its opposition.
Railway Minister Mukul Roy, a nominee of the Trinamool Congres, reminded Prime Minister Manmohan Singh that his party had conveyed its opposition to the bill through a letter to him and Finance Minister Pranab Mukherjee, according to people familiar with the proceedings. “We are not taking up the bill,” the finance minister said at the meeting.
Industry and markets were hopeful of a burst of activity from the government after GDP growth dropped to a nine-year low of 6.5% in 2011-12.
The letter from the railway minister had pointed out that his party was not part of the standing committee that cleared the bill, according to people familiar with its contents. Trinamool MP Sudip Bandopadhyay was a member of the standing committee on finance, but he quit the post after being made a minister of state. “We did not get an opportunity to present our views when the standing committee cleared the bill,”Roysaid in his letter to the PM & FM.
TMC’s support is crucial for ensuring the election of a Congress nominee as the next president.
The deferment of the bill gave yet another opportunity to the principal Opposition, the BJP, to criticise the Manmohan Singh-led government. “The government acts first and thinks later. The same route is being taken on all major issues. The government issued an order to open domestic retail sector to foreign supermarkets and then withdrew it. If the government had to consult its allies, it should have been done before taking the decision. The repeated adjournments only confirm the impression of policy paralysis,” said former finance minister Yashwant Sinha.
Parliament’s standing committee on finance, headed by Sinha, had recommended that foreign investment in Indian pension companies should be capped at 26%, the same as in insurance. The original version of the bill did not have any cap on foreign investment.
Interestingly, BJP is extending its support to this Bill and this emboldened the UPA leadership to go ahead with its presentation in the cabinet. It seems now that the Government will try again after the Presidential elections taking into account the nature of political combination at that time. The Left parties have been consistently opposing this PFRDA Bill and they have pointed out that the Government has learnt no lessons from the way the foreign fund mangers made a mess in the western markets leading to the loss of funds to the pensioners. Most of the pensioners are not well off and they survive on the amount of pensions. If they become the victim of uncertainty after the funds are deployed in the market, where is the social security for them?
The UPA-2 Government is so much in the grip of neo liberal ideas and unconcerned about the plight of the poor and elderly that without taking into account the consequences, the Government went ahead with Bill. This will be a disaster as the returns are not guaranteed and the funds will not flow to the pensioners in a uniform manner. The old pensioners will be constantly victims of anxiety and that will be bad for their health also.
Leading economist of the country, Dr Prabhat Patnaik, has mentioned with the elderly likely to constitute a quarter of India’s population by 2050, there is need for a publicly-funded, universal scheme that will overcome destitution among the aged
India’s social security system is woefully inadequate, when compared even to those in third world economies with no higher per capita incomes. Some States in India have fairly comprehensive social security schemes — notably Kerala, also West Bengal and Tamil Nadu — but the scale of the benefits is modest. However, the Union government has been quite lackadaisical in providing social security despite its enormous fiscal powers. Even the Unorganised Sector Workers’ Social Security Act, which came into force in 2009, is merely an enabling legislation; it does not seek to put on the statute books any specific comprehensive scheme of social security.
This stinginess is particularly evident in old-age pension schemes. Some State governments have responded to the need to provide old-age pensions, but are hamstrung by their meagre resources. The Union government’s Indira Gandhi Old Age National Pension Scheme (IGOANPS) covers only the Below Poverty Line (BPL) population and persons above 65 years of age; the pension amount it provides is an abysmal Rs.200 per month. Even so, an estimated 1.65 crore people access this scheme, an indication of the desperate need for succour.
Even if we add up all the existing pension schemes, they touch only the fringe of the problem. First, they are an assortment of specific schemes rather than an expression of a right to pension. Second, they do not provide universal coverage. Leaving aside the pension schemes of the organised sector, the others, as they are, target specific groups of unorganised sector workers; even when not tied to specific occupational categories, such as the IGOANPS, they cover only the BPL population, whose size is arbitrarily fixed by the Planning Commission at a ludicrously low level. Third, a large number of them insist on some contribution from the beneficiaries. And fourth, the amount of pension they provide, as we have already seen, is pathetically small. This is a serious problem, and likely to become even more so in the years to come, because the increase in longevity and the fall in the birth rate will raise the percentage of the “old.” (IRL-IPA)