California calling

The world8217;s largest pension funds 8212; they move and shake stock markets everywhere 8212; are visiting India to explore equity investment options. But India8217;s pension bill is in a limbo because the Left opposes market participation. Evidently, foreign pension fund managers, including those who manage behemoths like the California State Teachers Retirement System and the Los Angeles Country Employees Retirement Association, are more willing to bet on India8217;s long term growth prospects than some of our politicians are. And remember these funds face, by Indian standards, extremely strict regulatory standards. So, their exploration of Indian equity markets is anything but fanciful.

The government, especially the PM and his finance minister, would have been happier with this vote of confidence had their main ally shown some understanding. Having put the pension proposals through a select committee, having given notes of dissent, the Left still publicly opposed the bill. The last winter session was the third time the bill could not be put to vote. The delay is not making the Left terribly popular with young civil servants. Newly recruited bureaucrats, who have been part of the New Pension System since January 1, 2004, have lost out on the huge bonanza the equity market provided in the last two years. But bureaucrats in California will ride the Indian economic wave.

This is absurd and therefore the Congress should seriously think of getting the BJP8217;s support for the bill in the next session. Pension reform was an NDA baby. Asking the Opposition to vote for the bill will be smart politics. The BJP will have to come clean on its economic policy and think of its credibility as a serious party. If the BJP acts irresponsibly, the government should dare the Left: vote against and be responsible for both the end of the UPA the government will have to go if it loses a money bill, as well as allowing Americans, but not Indians, to invest in a more secure future.