Govt shelves pension fund reform plans

Govt shelves pension fund reform plans

New Delhi: In a blow to reforms, the government, under pressure from its ally, the Trinamool Congress, has shelved plans to reform pension fund norms.

According to a person familiar with the developments, West Bengal chief minister Mamata Banerjee has written to Prime Minister Manmohan Singh seeking more time to discuss the issue. She had demanded the inclusion of assured returns to the retired employees and the employees’ right to choose the firm in which the money is going to be invested. “She is of the view that it will not be good if the money is invested in risk zones," said the person, who did not want to be named.

The Trinamool, which has 18 members in the Lok Sabha, had earlier forced the UPA government to put on hold its decision to allow 51% foreign direct investment (FDI) in multi-brand retail, a decision considered to be the biggest reform move by the UPA in the last one year.

The Bill was listed after finance minister Pranab Mukherjee held discussions with Bharatiya Janata Party (BJP) leaders and reached an agreement to bring in some changes as demanded by the opposition. According to BJP leaders, who did not want to be identified, the government has agreed to include a provision regarding guaranteed returns in the Bill. The parliamentary standing committee on finance, headed by BJP leader Yashwant Sinha, had recommended the same. The BJP also had sought to define the quantum of FDI in the Bill instead of bringing it through an executive decision. The Left parties, Trinamool’s rival in West Bengal, have strongly opposed the Bill.