Union Finance Minister Arun Jaitley has observed that building consensus on issues such as pension across the political spectrum is not easy.
The finance minister was speaking at the launch of a new user-friendly and informative website of the Pension Fund Regulatory and Development Authority (PFRDA) at the First Pension Conclave. The minister also released on this occasion the First Annual Report of PFRDA for 2013-14 post-notification of the PFRDA Act. Releasing the report, the minister hoped that the regulatory authority would provide a conducive and enabling environment for expansion in pension industry with larger number of players.
Jaitley said that the PFRDA legislation has, despite the lack of consensus, gone through a process of guided development and adequate sensitisation. He highlighted the important aspects and implications of pension reforms, a key area of financial sector and economic reforms in the country. He said that an amendment to the Insurance Act to enhance the limit of FDI to 49% will also mean similar provision for the pension sector. The increase in the FDI limit to 49%, will permit inflow of foreign capital, investment expertise and new technology.
The minister said that, considering the fact that pension pay-outs, particularly unfunded and uncertain, are to be borne by the public exchequer, the pension reforms would mitigate this burden releasing resources for better deployment and utilisation in other social sectors. He highlighted the need to build up corpus of funded resources to eventually act as the source for pension pay outs in future, and also as a source for financing critical sectors as infrastructure and also capital market.
Highlighting the importance of NPS Swavalamban scheme for the unorganised sector people, the minister said that this segment required special support and urged the PFRDA to promote this scheme vigorously across the country. Expressing confidence about the role of the PFRDA in promoting Swavalamban Scheme, he said that the scheme signified an element of self-pride through participation of the less fortunate and excluded segments. The Finance Minister expressed confidence that the regulatory authority would formulate regulations for sound and sustainable growth of the pension system with due regard to the interest of the subscribers including setting-up an efficient and responsive grievance redressal mechanism, He exhorted the industry to come up with more and more new products that could compete with each other with benefit accruing to the pension subscribers.