Corporate India welcomes Pension Bill, says FDI to flow in

New Delhi: Hailing the passage of Pension Bill by Parliament, the Indian corporate world today said once enacted, the legislation would help attract much-needed foreign direct investment (FDI) and result in better products and services on offer.

“The passage of the Pension Bill is a welcome move as India needs FDI badly…FDI will attract global players to come in and invest in the country besides increasing efficiency of services,” President of PHD Chamber of Commerce and Industry Suman Jyoti Khaitan said.

Moreover, increased competition will lead to new products entering the market, he added.[caption id=“attachment_1090743” align=“alignleft” width=“380”]  FDI hopes for insurance sector. Andrew Middleton/Flickr[/caption]

After a delay of nearly a decade, Parliament today passed the Pension Bill, a key economic reforms legislation, that aims to create a regulator for the sector and allows at least 26 percent FDI.

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“We are confident that the passage of this bill will attract new products and players to enter the pension market. The rise in competition may even help in improving efficiency and quality of service,” Ficci secretary general Didar Singh said.

The Pension Fund Regulatory and Development Authority (PFRDA) Bill, 2011, was passed in the Rajya Sabha with 115 MPs voting in favour and 25, including Members from Left parties and TMC, against. The bill was passed in the Lok Sabha on 4 September.

“It (Pension Bill) is a great reform measure and will be a morale booster for global investors. It also shows political consensus building up again on key reforms,” Assocham secretary general DS Rawat said.

The bill would make the Pension Fund Regulatory and Development Authority (PFRDA) a statutory authority, unlike its present non-statutory status.

“The Bill confers statutory powers to PFRDA which would strengthen its promotional, developmental and regulatory functions in respect to pension funds in India, while also opening up FDI to the pension sector,” CII director general Chandrajit Banerjee said.

The bill provides subscribers a wide choice to invest their funds including in assured returns by opting for government bonds, as well as in other funds depending on their capacity to take risk.

It pegs FDI in pension sector at 26 percent or such percentage as may be approved for the insurance sector, which ever is higher.

The Pension Bill has been hanging fire since 2005 when it was first introduced in Parliament. It was reintroduced in 2011.

PTI