The Telegraph
Since 1st March, 1999
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Bill stuck over assured pension
- Govt rejects Left call to cut oil price

New Delhi, Nov. 13: The Congress and its ally, the Left, failed to resolve their differences over changes proposed by the government to pension regulations, putting at risk the chances of the legislation being passed in the winter session.

While the Left declined to accept the condition where there will be no guaranteed pension, as now, the government virtually dismissed its demand on another count — cutting petroleum prices.

At a meeting of the coordination committee of the ruling United Progressive Alliance with the Left, three hours of negotiations failed to crack the deadlock over the pension fund regulatory development authority bill.

The talks got stuck on the Left insisting that the government continue the current position where 50 per cent of a government employee’s last drawn basic salary is paid as pension on retirement. This, the government argued, defeats the entire purpose of reforming the pension system through the bill where the intent is to cut the burden on the exchequer.

The government distributed a note at the meeting, estimating its current pension liabilities at 1.64 per cent of the gross domestic product, or Rs 52,480 crore on the basis of estimated GDP for 2005-06.

The pension funds, now managed by the government, are proposed to be placed under a public sector entity. The original plan to appoint private fund managers was diluted under Left pressure.

But if there’s a guarantee of 50 per cent payment and the fund manager fails to come up with that amount, the government will have to make up the shortfall.

The debate led to some sparks flying between finance minister P. Chidambaram and Left leaders.

After the meeting, a senior Congress leader sounded sceptical about the fate of the bill, which the government had wanted to move in the winter session that starts next week.

“There was no agreement,” said a Left leader, though there was some give and take. The government accepted the Left’s suggestion that the pension funds of Group C and D employees will be invested only in government securities and public sector bonds. Group A and B employees will have the option of investing the money in the stock market.

The CPM leadership may not be averse to changing its stand but the Left trade unions are opposed to the bill.

On the women’s bill, however, a consensus was reached to table it in the coming session.

The meeting also discussed the Special Economic Zone Act. The Left leaders insisted their amendments be passed in the coming session. “The Centre told us a group of ministers has been set up which will consider the Left’s suggestions,” said a Left leader.

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