The Pensions Bill has been deferred. Once again. Why is not a mystery. Mamata Banerjee's party, which is a hefty member of the ruling coalition, says it remains opposed to the Bill. Railways Minister Mukul Roy, who belongs to Ms Banerjee's Trinamool Congress, attended the cabinet meeting on Wednesday morning. But he said his stand had been expressed in advance via a letter sent to the Prime Minister and Finance Minister Pranab Mukherjee. Mr Roy says he had made it clear that the Trinamool wants more political consultations on the proposed legislation. He also objected to the fact that his party was not represented on the parliamentary committee that prepped the Bill for review by the cabinet.
The Bill, which has been stalled for years as political parties squabble over its provisions, was expected to be discussed by the Cabinet today, but was not brought up - there was no explanation offered. Sources say that the Congress, which leads the UPA coalition, does not want to alienate Ms Banerjee ahead of the election for the next President of India, who will be elected in July. The election is a major prestige point, and the Congress is being careful to consult all its allies in detail to ensure its candidate evokes wide consensus.
The Pension Bill is seen as a key and long-pending reform that could help boost foreign investment in India. The BJP had suggested that if Foreign Direct Investment or FDI is limited at 26%, it will support the Bill's passage in Parliament. The Left and the Trinamool have not come around. And though repeated clashes with Ms Banerjee have forced the government to capitulate on reform in retail and other important policy decisions, the Congress does not want to rock the UPA boat especially till after the new President is elected. So, political expediency demands that contentious issues be put right back on the shelf for another time.
The Union Cabinet was expected to discuss and clear three amendments to the Bill: to allow a contributor to the pension scheme to withdraw funds in case of an emergency; to give subscribers a minimum assured return on investment and to provide a cap of 26% on foreign direct investment in the scheme.
The Bill, also called the Pension Fund Regulatory and Development Authority Bill, allows pension funds the flexibility to appoint a professional fund management company. Currently, these savings are invested in government securities that offer a fixed rate of return. The changes will affect how savings of nearly 25 lakh Indians are invested.
Also, under the National Pension System (NPS), every subscriber will have an individual pension account, which he can port with a job change. Every government employee hired since 2004 is covered by the NPS and it is voluntary for all other citizens since 2009 including the unorganized sector.
To pass the Bill in Parliament the government needs numbers; this time, however, it is not the likely loss of support of the Trinamool's all important 19 MPs in the Lok Sabha that has made the government shelve the Bill. For, say sources, in the season of new friendships, the Congress' growing closeness to the Samajwadi Party could ensure that Mulayam Singh Yadav and his 21 MPs will be by the UPA's side on the Pension Bill, if it does see the light of day anytime soon.
The Samajwadi Party chief has so far ruled out any formal equation with the Congress-led alliance that rules at the Centre, but has bailed out the government a number of times on important issues and Bills in Parliament. At a recent dinner to celebrate the UPA's three years in governance, Mr Yadav got higher Billing than official UPA allies - he was seated prominently on the dais and then at Congress president Sonia Gandhi's table for dinner.
Earlier this week, when Mr Yadav's daughter in law Dimple Yadav filed her nomination papers to contest Lok Sabha by-elections in Kannuj, a seat vacated by her husband Akhilesh Yadav now that he is the Chief Minister of Uttar Pradesh, the Congress was prompt in announcing that it would field no one against her.