UPA meets its Left allies
Government's stand on the issues of the Pension Fund Regulatory and Development Authority (PFRDA) Bill, the SEZ Act and Rules, and reducing petroleum product prices were argued upon, reports Sutirtho Patranobis.india Updated: Nov 14, 2006 19:33 IST
On Monday when the UPA met its Left allies for the 14th coordination committee meeting, it was ready with three notes arguing the Government's stand on the issues of the Pension Fund Regulatory and Development Authority (PFRDA) Bill, the SEZ Act and Rules, and reducing petroleum product prices.
The discussion on the PFRDA was the most contentious, taking up nearly two hours of the three-hour meeting. The UPA cited the Standing Committee on Finance's comments on the necessity of "setting up of the PFRDA as a statutory regulatory body for managing the NPS (new pension scheme) mainly on account of the burgeoning fiscal stress of pension payments on the Central and State revenues."
One recommendation was that subscribers could invest 100 per cent of their funds in government securities. The second recommendation, according to the note, is to provide that at least "one of the pension funds shall be a government company or wholly owned by a government company or government companies. It can be further provided that the first three fund managers shall be LIC MF (mutual fund), UTI MF and SBI MF."
The second note on the SEZ Act dismissed Left's demand for amendments to the Act and also attempts to allay its fears that SEZs will be turned into a real estate bubble by investors.
The 20-page note said that there should be no amendment to the Act for at least two years "as it would also dilute the very basic objective of the scheme to attract fresh investment into the country." It added that even minor amendments to the Rules would be made in the "larger interests of facilitating implementation of the Act and the Rules."
Contrary to the Left's fear that workers rights would be compromised in SEZs, the Government note said: "The SEZ Act through an amendment brought about by the Parliament envisages that the Central Government shall have no authority to relax any law relating to the welfare of the labour in SEZs."
The Government also dismissed the Left's demand to reduce prices as the price of international crude oil has softened. The note on the issue categorically states that at this "juncture any reduction in domestic prices of petrol and diesel will be short-lived."
The reasons that the government gave to the Left included the possibility that "international prices of oil are projected to increase from the current level as the winter season approaches. The OPEC resolve (to cut output by 1.2 million barrels per day), growing geo-political risks, strong demand forecast in 2007, anticipated decline in winter stocks are all expected to put pressure for further increase in the international price."