Pension Bill in cabinet today; no FDI provision

While the finance ministry is,in principle,fine with capping the FDI at 26 per cent,it feels this can be done under general regulations of the Foreign Exchange Management Act (FEMA). It has cited the example of private sector banks,depositories,stock exchanges and asset reconstruction companies,in which the foreign investment limit is not specified in the respective Acts. Moreover,FEMA regulations are subject to Parliament scrutiny,it noted.

While the Cabinet is likely to approve the Standing Committee’s recommendation for the constitution of a Pension Advisory Committee to look after the interest of subscribers,sources said a majority of the committee’s recommendations are likely to be rejected. On hold since 2004,the PFRDA Bill,which seeks to provide statutory backing for the pension regulator,was re-introduced in the Lok Sabha in the last Budget session. While the government managers bungled during its introduction with the Left moving a motion for division,it was the BJP which came to its rescue,making up for the absence of Congress MPs.

With the Union Cabinet likely to reject Standing Committee’s recommendations regarding FDI,the government may have to make an extra effort to keep the Opposition BJP on board in implementing its economic reforms agenda. On Wednesday,the Union Cabinet is also likely to take up Export-Import (Amendment) Bill,2011,Central Educational Institution (Reservation in Admission) Amendment Bill,2010,and Prohibition of Technical Educational Institution,Medical Educational Institution and University Bill,2010,among others.