Major task
before us now is to Implement PFRDA Act 2013 in Letter and in Spirit: FM
The
Union Finance Minister Shri P. Chidambaram stated today that with the Pension
Fund Regulatory and Development Authority (PFRDA) Bill having been passed by
Parliament, the major task before us was to implement it in letter and spirit.
He mentioned that most countries are moving from a ‘defined benefit’ pension
system to a ‘defined contribution’ system to enable pension related commitments
to be sustainably discharged. The National Pension System (NPS) was a step in
this direction. He mentioned that the PFRDA Act would give statutory status to
the PFRDA, the pensions sector regulator, and in addition to other objectives,
aims to address apprehensions regarding safety and yield under the NPS. He
stated that the salient provisions of the Act related to subscriber interest
include choice of pension fund manager and investment schemes to the subscriber,
availability of minimum assured return schemes to be notified by the PFRDA and
the option of investment only in government securities. Subscribers with
greater risk appetite had the option of investing in equities and other areas.
However, there was a cap placed on these options to prevent excessive risk
taking. The Union Finance Minister Shri P. Chidambaram was addressing the
Fourth Meeting of the Consultative Committee attached to the Ministry of
Finance here yesterday.
Observations
related to the need to keep inflation in check to ensure good real returns,
focusing on the unorganized sector, including agricultural labour, ensuring
that pension fund managers were of the highest ability and standing and the
need for suitable publicity to create awareness about NPS, were made by
members.
Shri
Chidambaram replied to the various suggestions and queries of the members and
explained how the Act and efforts of the Government since 2003-04 had tried to
address these concerns. He mentioned that these initiatives were relatively
recent in origin. Hence, work on the NPS was still a work in progress that
would, however, achieve these various objectives over time. He mentioned that
at present the total pension funds under NPS were to the tune of Rs. 37,000 Crore.
He stated that investment of these funds would be made in accordance with the
law passed by Parliament and the PFRDA remained accountable to Parliament
through various provisions in the Act. The Finance Minister stated that there
was a need to extend the reach of the NPS and give it wider publicity, to
enable more and more people to join the NPS, especially in the unorganized
sector.
Members
of the Consultative Committee Shri Arvind Kumar Chaudhary, Shri Narahari
Mahato, Shri Partap Singh Bajwa, Shri Prabhatsinh Chauhan, Shri S.P.Y. Reddy,
Prof. Saugata Roy, Shri Suresh C. Angadi and Shri W. Bhausaheb Rajaram, all
Members of Lok Sabha; Shri Ajay Sancheti, Shri Amar Singh, Smt. Rajani Patil,
Shri Rajeev Chandrasekhar, Shri Sabir Ali, Dr. Ashok Sekhar Ganguly, Shri Murli
S. Deora (Permanent Special Invitee), all Members of Rajya Sabha attended the
aforesaid Consultative Committee Meeting. The meeting was also attended amongst
others by the Minister of State for Finance (Revenue) Shri Jesudasu Seelam,
Finance Secretary, Shri R.S. Gujral, Revenue Secretary, Shri Sumit Bose,
Secretary, Financial Services, Shri Rajiv Takru, Secretary, Economic Affairs
Dr. Arvind Mayaram, Secretary, Disinvestment, Shri Ravi Mathur, Chairperson
CBEC, Ms. Praveen Mahajan, Chairman CBDT along with senior officers of Ministry
of Finance.
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