Pension Bill runs into Left wall again

To be fair, both these are not entirely fresh demands of the Left. It has been demanding a public sector fund manager and a 100 per cent government bonds investment option, right from the start. The intriguing part is that the government has already acceded to these demands. An option to invest 100 per cent of workers’ pension savings in government securities has already been added to the Bill. The Bill also provides for a public sector fund manager’s presence in the new system. Despite the accommodation of these demands, the Left’s belligerence is puzzling.

CPI General Secretary Prakash Karat says, ‘‘We have met the PM earlier on this. We have told the government that we want only public sector fund managers and that investments should be restricted to government bonds.’’ Social security experts say there is no need to create a new pension scheme, if these demands were agreed to. ‘‘This would hardly constitute reforms and the government could easily shift its new employees into the Employees’ Provident Fund Organisation. The EPFO invests in government securities and the funds are managed by State Bank of India,’’ says an economist.

The official says, ‘‘The Left parties’ need to do a rethink on this. If one invests only in government bonds, he or she won’t accumulate enough funds at retirement to buy an annuity. Many of the civil servants are well-educated and may want to put 20 per cent of their money in stocks. Why should they say no to that?’’ A simple option is that the government could make the 100 per cent gilt investments managed by a public sector fund manager, the default option for civil servants. If they so desire, the employees could then exercise their choice to shift to a different asset allocation or fund manager. It is learnt that the Left party leaders are agreeable in principle to the government’s arguments in favour of the Bill, but claim that the trade unions are not amenable yet.

‘‘There’s no breakdown in the talks. All the other issues are settled,’’ the official added. The moot point that the Left and the government seems to be forgetting is that the PFRDA is not only supposed to cover civil servants’ pensions, but also enable the unorganised majority of India’s workforce to have a retirement savings vehicle. The rest of India shouldn’t be held to ransom for a scheme that today only applies to around 210,000 government servants.

Left ‘in principle’ agrees to selloff select PSU shares

NEW DELHI: Top Left leaders who met Finance Minister P.Chidambaram on Wednesday are believed to have agreed “in principle” to sale of stocks in select non-Navratna profit-making PSUs to raise resources but have told the minister that green light would come only after all Left parties discuss the issue. In separate meetings with CPI(M) general secretary Prakash Karat and CPI general secretary A B Bardhan, the government outlined plans to mobilise about Rs 3,000 crore from the sale of PSU shares. —ENS