New Delhi, Jan 22
Prime Minister Manmohan Singh Monday pushed for pension reform and
urged chief ministers to allow a part of the funds to be parked in
shares to expand social security net and ensure healthy state
finances.
"It is my
belief that there is a lot to be gained by moving forward and
allowing a multiplicity of pension products delivered by variety of
agencies to people," the prime minister told a chief ministers'
conference on pension reforms.
He said a suggestion being considered is to allow a part of the
funds to be put into areas as prescribed for non-government
provident funds, pending resolution of issues related to the Pension
Fund Regulatory and Development Authority Bill.
"The pattern permitted has been circulated and will fetch a return
superior to that given by the government at present without
compromising the safety factor," he said, adding the returns
amounted to just 8 percent under existing schemes.
The new system calls for investing 5 percent of the corpus in
shares, 25 percent in central government securities, 15 percent in
state government securities and 25 percent in bonds.
The Left parties, which support the United Progressive Alliance (UPA)
government, are opposed to pension reforms. As a result the
Employees Provident Fund Organisation has not adopted the new
guidelines.
Besides the chief ministers of a number of states, the conference
was attended by, among others, External Affairs Minister Pranab
Mukherjee, Defence Minister A.K. Antony, Home Minister Shivraj Patil
and Finance Minister P. Chidambaram.
The prime minister said 11 percent of India's workforce was covered
under some form of pension schemes and that, even within the
organized sector, the coverage was accounted for largely by
government employees.
"Therefore, workers in the unorganised sector, constituting 90
percent of the workforce, need a comprehensive pension system which
they can subscribe to," the prime minister said.
"We need better management of our pension liabilities so that state
finances can be managed in a healthy and sustainable way in future.
This is a very important basis for the changes in the pension
system."
Earlier, the finance minister said that the central government's
expenditure on pension had gone up from Rs.32 billion in 1990-91 to
Rs.289 billion last fiscal, and jumped from 7.6 percent to 10.5
percent as a percentage of tax revenue to total pension outgo.
"Yet, a unique advantage India enjoys today is it has a relatively
young working population. Around 220 million persons employed are
below 40 years of age," the finance minister said.
"Thus, a large majority of India's workforce, that is in the age
group of 20-40 years, has the opportunity and the capacity to save
for their retirement. The moment must be seized," he added.
Chidambaram said he appreciated the fact that 17 state governments
had decided to introduce a new contribution pension system for new
employees and some others were taking pro-active steps towards the
same
(c) Boloji.com :
1999–2008 : All
Rights Reserved Boloji.com is owned and managed by Boloji Media Inc Privacy Policy |
Disclaimer
No part of this Internet site may
be reproduced without prior written permission of the copyright holder.
