India Current Affairs-The Proposed Pension Bill

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The Union Cabinet has given its approval for the Pension Fund Regulatory and Development Authority Bill, which seeks to establish an authority that will develop, promote and regulate old-age income security. The Bill doesn’t mention the extent of foreign ownership to be allowed in Indian pension funds and in a central record-keeping agency. But in August 2011, the Finance Ministry had proposed to cap foreign investment in the pension sector at 26%, a suggestion accepted by a Parliamentary panel that was examining the Bill.

Allowing 26% foreign direct investment in pension management would help the government claim its economic liberalization is proceeding. The process, begun in 1991, has dramatically changed India by allowing formerly State-owned industries to flourish in private hands. But many restrictions remain in place in key sectors, including finance where restrictions on foreign ownership remain.