UPA finds ways to push pension reforms forward

New Delhi, Jan 22 | Updated: Jan 23 2007, 05:30am hrs
Using a different approach to push ahead with its proposals on the contentious issues of banking and pensions reforms in the last few days, the Manmohan Singh government has demonstrated its dexterity in devising ways to put on track initiatives that had been grounded due to stiff Left opposition.

The latest approach of relying on a combination of tactics--like the consensual approach of showcasing support from majority of the states, as well as opting for a route that bypasses parliament to push forward with the pensions reforms, or by breaking up the banking amendment bill to allow an ordinance empowering the RBI to cut statutory liquidity ratio below the current floor limit of 25% is now likely to be followed in other reforms measures that have been stuck in the legislative process.

Asserting that the two measures on pensions and banking had been taken with a clear assessment of the Left response, government managers on Monday indicated that other contentious issues like increasing the FDI cap in insurance sector to 49%, raising funds from disinvestment proposals that are currently stuck in the pipeline as well as approval of SEZs could be taken up next.

Government managers pointed out that their efforts on pensions reforms, for instance, was bolstered by the support of the 19 states who have not only supported the proposal to invest part of pension funds accrued under the new pension system in the stock market, but even said that the move should have been made much earlier. Interestingly, NDA ruled states of Bihar and Rajasthan were among those who expressed concern at the delay over passage of the PFRDA Bill.

It was, however, pointed out that the government did not want to give any impression that it was taking steps disregarding the Left viewpoint. To this end, finance minister P Chidambaram said the investment structure proposed on Monday was only interim and that the government will be making all efforts to seek Left support on the PFRDA Bill.

We will continue to consult the political parties... Chidambaram said, adding it was ultimately political parties which would give their views on the Bill in Parliament.