Tuesday, January 23, 2007

On Govt agenda today: SEZs, pension reforms

Vikas DhootPosted online: Monday, January 22, 2007 at 0000 hrs Print
EmailUPA: Insurance Bill with GoM, parties to be consulted, says FM
New Delhi, January 21 : As it grapples with fresh Left opposition on
insurance reforms, the UPA government will take up tomorrow two issues
at the heart of its reforms programme — pension reforms and Special
Economic Zones.

Prime Minister Manmohan Singh and Finance Minister P Chidambaram will be
meeting state chief ministers, seventeen of whom have already voted for
pension reforms with their decision to move new employees away from
defined benefit pensions. Later in the day, the Empowered Group of
Ministers headed by External Affairs Minister Pranab Mukherjee will
scrutinize closely the SEZ rules and consider the suggestions and
concerns expressed by senior leaders from the Left and Congress last month.

Speaking to The Indian Express, Finance Minister P Chidambaram said that
the government will discuss “the draft (Pension Funds Regulatory and
Development Authority) Bill and the investment guidelines for
non-government provident funds” with state CMs. ‘‘We can’t keep the
money in public account. We hope that the CMs will give us the benefit
of advice,’’ Chidambaram said, referring to the funds that have already
been collected from new government employees at the Centre and 17 states
under the New Pension Scheme. Till the PFRDA Bill is passed, the
government is suggesting that the accumulated pension funds be invested
as per the investment guidelines recommended for non-government PFs such
as the EPFO, which allow portfolio investments of upto 5 per cent in
equities. However, the EPFO hasn’t adopted these guidelines yet, due to
opposition from the Left parties’ trade union representatives on its board.

‘‘By and large, political parties have agreed¿ there are some
differences on who should be the pension fund managers and where the
funds should be invested. We hope that with 17 states and the Centre
having switched to the NPS, it’s only a matter of time before we
complete the negotiations, Chidambaram said.

The response from Left-run states of Tripura, West Bengal and Kerala
would be crucial. Though they have the fastest rising pension bills in
the country, the states haven’t initiated any damage control exercise
yet due to lack of political will.

West Bengal Finance Minister Asim Dasgupta told The Indian Express that
the decision (to join the NPS) rests with the Chief Minister. On his
recent trip to Kolkata, the PM had turned to Buddhadeb to break the
pension reform impasse.

A considerable mid-course correction can be expected on SEZs, again at
the centre of a row after protests on land acquisition and compensation
in proposed SEZs like Nandigram. While the PM has promised a
comprehensive relief and rehabilitation law to address those concerns
soon, there are other concerns. “Every issue that has been raised in
relation to SEZs would be placed before the empowered GoM for
direction,” Commerce Secretary Gopal K Pillai said yesterday.

“The Department of Revenue has a number of reservations on SEZs. They
were considered and largely rejected. The (controversy over) land
acquisition has caught everyone’s attention,” Chidambaram told The
Indian Express. One of those concerns was putting a cap on SEZs, that
had earlier been rejected by the EGOM, but would raise its head again at
tomorrow’s meeting. “I am not against SEZs, but I am against the
proliferation of SEZs,” he said at the The Indian Express Idea Exchange



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