The deadlock between the UPA and the Left over the Pension Fund Regulatory and Development Authority (PFRDA) Bill continued on Friday after the two failed to reach an understanding whether to introduce it in the current session.
The Left did not agree to the government suggestion that the pension funds for group C and D employees, which comprises 92 per cent of government employees, would be with public sector financial institutes, SBI, LIC and UTI, for three years.
After three years, they would have the option of investing the money in the stock market. The Left feels that this is not giving an assured return after retirement, as the returns would be related to market behaviour.
The Left also feels that while initially three public sector undertakings will manage the funds, at a later stage private fund managers would come into the picture, further diluting the issue of assured returns.
"The UPA did not specify the amount but hinted that when the volume of the pension fund increases, private players might come in to manage the fund," says CPI (M)’s leader in the Lok Sabha, Basudeb Acharia.
The Government too is not keen on accepting the Left proposal that there should be a guarantee that employees would get 50 per cent of average of three years’ last drawn salary. In case, this is not fulfilled, the government should step in to ensure this.
The Government told the Left that the new scheme is contributory in nature and did not agree to stand as guarantor.
Among others, CPI (M) politburo member Sitaram Yechury, Acharia, and CPI’s Gurudas Das Gupta attended Friday’s meeting . External Affairs Minister Pranab Mukherjee and Finance Minister P Chidambaram represented the government.
When asked, who, the government or the Left, was changing its stance on these crucial matters, Yechury said. " We (Left) have publicly stated our position on these issues. It is obvious who is."
The Left bloc will have an internal meeting on the issue before they meet the Government next week.
In a note that the UPA had submitted earlier to the Left it had said that the government’s pension liabilities have grown faster than the normal GDP growth rate.
"In the last 17 years, while nominal GDP grew by a compound rate of 14.5 per cent, the Central Government’s outgo on pension increased at the compound rate of 17.8 per cent," the note said.
It added that state pension payments increased from Rs 1598 crore in 1987-88 to Rs 38370 crore by 2004-05.
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