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Oct 05, 2012, 10.18 AM IST
Yogesh Agarwal, chairperson, PFRDA, in his reaction to the Cabinet nod on the increase of FDI in the pension sector, explains that the Bill has found support among a majority of parties and will give the PFRDA adequate teeth to take action against errant fund managers.
Yogesh Agarwal, chairperson, PFRDA, in his reaction to the Cabinet nod on the increase of FDI in the pension sector, explains that the Bill has found support among a majority of parties in the Opposition, including the BJP and the ruling coalition. Agarwal adds that if the Bill was passed it would give the PFRDA statutory powers to put errant pension-fund manages in line.
Below is an edited transcript of the reaction on CNBC-TV18.
Q: What is your reaction to the Cabinet finally allowing the increase in FDI in the insurance and pension sectors?
A: As far as the pension sector is concerned, I think there has not been any increase in the amount of FDI because even at present, the pension fund managers were allowed to have an FDI upto 26 percent. I think Cabinet’s announcement was made with a view to get the Bill passed in Parliament.
Q: The Cabinet note clearly proposes a similar FDI cap for the insurance and pension sectors...
A: If that is so, then why are you saying that an FDI of only 26 percent is allowed in the pension sector?
Q: The increase in FDI cap will actually be increased to 49 percent...
A: We will have to wait for clarity on whether the increase will be by 26 or 49 percent. But that does not takes away the fact that the announcement has been made with the aim to get the PFRDA Bill legislated.
Q: If the Bill is passed, it will give you statutory status. What will that mean for the PFRDA?
A: It will mean that the PFRDA will acquire the statutory powers to put errant pension fund managers in line without the need to stand in a court of law. So that will accord the PFRDA a lot of powers in terms of regulating the pension fund managers.
Q: You have obviously heard the comments that have come in from political parties that have been opposing this move saying that this is actually going to harm people, not benefit them, how do you take on that criticism. How do you respond to these arguments?
A: That's not what I hear. The Opposition, led by the BJP, has agreed to support the PFRDA Bill. I think a majority of the parties in the Opposition and the ruling coalition is in agreement over the PFRDA Bill which is in the interest of the country as well the pensioners. So, I don’t think there is any problem on that front.
Q: How soon do you believe you will actually be able to improve the pension sector?
A: I wouldn't like to hazard a guess on that because I think we should leave it to the Cabinet to push the Bill in Parliament.
Q: For the lay person, what does this mean for pensioners and the common man?
A: For the first time in India history of the non-government sector, an individual has the chance to subscribe to a genuine pension plan as oppose to some imitations which have been floating around for quite a sometime.
Q: What will be next course of events?
A: The Bill which will go to Parliament will contain all the features required to address all concerns. I think as far as passing of the Bill is concerned, it is best left to the Cabinet to see it through in Parliament and I don’t think we should worry too much on that.
Q: What will be the impact if the Bill is legislated at the winter session of Parliament?
A: The pension sector will gets a boost, the PFRDA will be doubly strengthened and will give a further impetus to extend the pension concept the people who have availed it.
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