The Pension Fund Regulatory and Development Authority (PFRDA) Bill was withdrawn from the government's list of business in the Lok Sabha on Wednesday after Banerjee wrote to finance minister Pranab Mukherjee objecting to certain provisions of the Bill. Government sources say the Bill is now buried for good.
The West Bengal chief minister's letter, sources say, harps on the need to keep an option of assured returns in the Bill for subscribers of pension funds. Further, she said a government employee's pension money should not be subject to mandatory investments in equity funds and that his pension funds should get a minimum assured return not less than what he gets now. The government employee should get 100% rights over where his money is going and what he can expect as a return, she wrote.
For the government, which had somehow hammered out a compromise with the opposition BJP on the crucial reform Bill by giving in to the latter's demand that a 26% cap on FDI in the pension sector be mentioned in the Bill, Banerjee's unrelenting stand comes as an unpleasant surprise.
Top sources say that Banerjee lost her nerve after the Left parties announced a massive series of agitations in the state, including a bandh to protest against the government's move on pensions. The political cost of the PFRDA Bill will be high for Banerjee as the Left will portray her as being part of government which deprived people of their old-age pensions, equating investment in equity funds with too much risk taking, said a top source in the government.
Earlier, the standing committee on finance had rejected the government's efforts to mention the specific cap on FDI in the rules, and not the PFRDA Bill. While the mention of the cap in the rules would have given the government a lot of administrative room, the government was also mulling inclusion in the Bill of a provision to automatically raise the ceiling that is, without fresh parliamentary consent.
The standing committee too wanted the option of minimum assured returns to be part of the Bill. The government did not take these views into account while clearing the Bill in the Cabinet, but had to give in later when prospects of clearing the Bill appeared dim.