At a board meeting in Mumbai last week, the discussion went beyond taking organisational decisions into the future of economic reforms. On top of the agenda was pension reforms. In any such discussion, faces usually light up, ideas begin to stream. But this time, in a matter of a few minutes, the faces were crestfallen, the ideas were conspicuous by their absence. I have yet to see a group of men, managing hundreds of thousands of crores, so pessimistic on the future.

With nobody else left to strike at, they blamed the reforms troika of Manmohan Singh, P. Chidambaram and Montek Singh Ahluwalia for backtracking on reforms. They said that despite having icons of liberalisation at the helm of affairs, reforms in the UPA administration have reversed; what the NDA had begun, the UPA has ended. Their conclusion: having reformists is no guarantee to having reforms delivered.

On Wednesday the Left, in a fit of rare magnanimity and partial logic of the political economy kind, agreed to soften its opposition to the Pension Fund Regulatory and Development Authority Bill, with two conditions:

• The money will be managed by government institutions like LIC and, GIC

• The money will be invested only in government securities (G-Secs).

To my mind the scheme is a non starter and we may as well drop this half-step, this pretence. Unlike in the case of disinvestment of PSUs or increasing the percentage of FDI from 26 per cent to 49 per cent (a rise that makes no difference to the operation of the company), we can’t have a half step in pension reforms.

... contd.