Published On: Thu, Jan 19th, 2012

India Current Affairs-The Proposed Pension Bill

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.

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