The government today approved amendments to the PFRDA Bill 2011 while agreeing to the proposed 26% foreign investment in the pension sector but refrained from providing assured returns to subscribers in the proposed law. The government had decided not to mention FDI cap in the legislation itself for retaining the flexibility of changing it through an executive order.
The 26% FDI cap is to be mentioned in the regulations to the legislation. The changes to the PFRDA Bill were approved by the Union Cabinet at its meeting here. The Bill, which has already been scrutinised by the Parliamentary Standing Committee on Finance, is likely to be taken up for consideration and passage in the Winter Session beginning November 22.
“The government is of the view that FDI cap in the pension should be at 26 per cent at par with the insurance sector. However, it would like to retain the flexibility of changing the cap of FDI as and when required and that is why it has not been kept as part of the bill”, an official spokesperson said.
The proposed legislation, the official said, will not provide assured returns to the subscribers of pension schemes. The Committee, which is headed by senior BJP leader and former Finance Minister Yashwant Sinha, wanted the government to specify the FDI cap in the legislation itself and provide minimum guaranteed return to subscribers.