The Government may propose an
investment option for assured returns in the New Pension Scheme (NPS). These
proposals will be part of the official amendments to the Pension Bill, which is
to be moved during the ongoing Monsoon session of Parliament.
“Apart from the existing
investment options, the Government may incorporate more options. One will be
for assured returns,” a highly-placed source told Business Line. The
second option will not give any assured returns, but give maximum safety, he
added.
At present, there are three
schemes. The first one provides investment, mainly in equity, the second one in
Government securities and the third one provides investment in bonds issued by
any entity other than Central and State Government. These bonds include rated
bonds/securities of public financial institutions and public sector companies,
rated municipal bodies/infrastructure bonds and corporate bonds.
Apart from these three options,
there is a default option, which is also called Auto Choice, where pension
money is invested in equities, Government securities and corporate bonds in
proportions which vary with age.
The option related to assured
returns is based on suggestions given by the Standing Committee on Finance. The
Committee, in its report, said, “It desires that the Government must devise a
mechanism to enable subscribers of NPS to be ensured of such a minimum
assured/guaranteed returns for their pensions so that they are not put to any
disadvantage vis-à-vis other pensioners.”
The Government has also accepted
the committee’s views on foreign direct investment. Accordingly, it will be 26
per cent.
Acceptance of these suggestions
has won support from the principal opposition party, BJP.
“Since our concerns are taken on
board, we have no objection to the Bill, which was initiated during our time,”
senior BJP leader and Chairman of the Standing Committee, Yashwant Sinha, told Business
Line.
Sinha said there was no
understanding between the Centre and the BJP on the Insurance Bill.
“We have given our suggestions on
the Bill. Now the ball is in the Government’s court. We will await their
suggestions,” he added.
The Left parties said the Centre
had not reached out to them on the Bill. “We have not been approached on the
Insurance Bill,” said CPI(M) leader Sitaram Yechury.
Courtesy: Business Line, 06th
August 2013
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