A last-ditch effort by the government to save the long-pending Pension Bill appears to have failed with its Left allies ruling out any role for private players in the business.
Although Finance Minister P Chidambaram expressed his government's willingness to invest the entire pension funds in government securities—instead of putting it in the private ones—the Communist Party of India-Marxist (CPI-M)-led Left Front refused to support the move.
The Left, which supports the Prime Minister Manmohan Singh's United Progressive Alliance (UPA) government, has made known its "serious reservations" about the proposed pension bill saying it would not support the government's plan to make investments from the pension fund in the stock market.
Left sources said the prime minister was unhappy over the delay in passing the bill.
"(Manmohan Singh) said it had been more than two years we have been discussing the bill and we are still discussing it. He said there should be a decision on it soon," a Left leader who attended the UPA-Left coordination meeting on Monday said.
According to the source, the Left suggested that the prime minister should talk to the trade union leaders also.
In a note handed over to the Left leaders the government said they would add a provision to the proposed bill to make available to subscribers an "option of 100 per cent investment of their funds in government securities".
"In the case of group D employees it can be provided that their funds shall be wholly invested in government securities for a period of three years and only thereafter they may exercise their option to choose another pattern of investment," it said.
The note also said: "To provide that at least one of the pension funds be a government company or wholly owned by a government or government companies. It can be further provided that the first three fund managers shall be Life Insurance Corp Mutual Funds, Unit Trust of India Mutual Funds or State Bank of India Mutual Funds."
However, Left leaders are not amused.
"We have seen what happened with the public sector mutual funds when UTI's U64 mutual fund scam occurred. We cannot trust them also," Communist Party of India general secretary AB Bardhan has said.
"The government cannot give us an assurance that such things will not happen," Revolutionary Socialist Party (RSP) leader Abani Roy said.
The government has also pointed out that there had been "exponential growth in pension liabilities" of the central and state governments.
"The pension liabilities now account for 1.64 per cent of GDP, which the governments can ill afford when there are competing social and developmental outlays to be met," the note said.
The Pension Fund Regulatory and Development Authority bill 2005 had been referred to the Parliament standing committee following Left opposition. The committee had suggested amendments and modifications to it.
The government needs the 62-member Left Front's support in the Lok Sabha to pass the legislation.