Promoters to get your Pension and PF!

Promoters  to get your Pension and PF!
Troubled Galaxy Destroyed Dreams, Chapter: 819


Palash Biswas

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It seems that the corporate government of India has managed the seasoned tune of floor adjustment in the Parliament winter session. We may not hope any respite as the entire lot of political class is inflicted with gross graft and has no moral courage to discuss policy making. Hence,Promoters  to get your Pension and PF!The Finance Ministry is all set to relax norms to enable pension and provident funds to invest in the corporate bond market, with a view to provide an additional funding source for infrastructure projects. Cash-strapped infrastructure projects may soon find reliable sources of long-term financing, with the finance ministry championing modifications in the investment norms for pension and provident funds to channelise their large cash inflows into infrastructure debt funds.Infrastructure debt funds or IDFs are the government's big idea to provide long-term funds for India's $1 trillion (about Rs 55 lakh crore) infrastructure development target over the next five years.On the other hand, market has to be boosted with Rajiv Gandhi equity scheme!he Finance Ministry is likely to notify the Rajiv Gandhi Equity Savings Scheme (RGESS), which is aimed at attracting retail investors to equity, within this week.



Communist Party of India-Marxist (CPI-M) leader Basudeb Acharia said on Tuesday that opposing FDI in multi-brand retail was the party's "top priority" in the winter session of Parliament which begins on November 22.According to reports, the Left also submitted a notice to move an adjournment motion in the Winter Session of Parliament for a vote on the Centre's decision to allow FDI in multi brand retail.

The Lok Sabha and Rajya Sabha adjourned sine die on  September 07. Several hours were lost due to interruptions on the issues of black money, violence in Mumbai and allocation of coal blocks.  Lok Sabha worked for 20% of the scheduled hours and Rajya Sabha for 27%.  102 Bills are pending at the end of this Monsoon Session. One Bill was withdrawn, 6 legislative Bills were introduced and 4 Bills were passed during the session. This note lists the legislative business conducted during the Monsoon Session.

"FDI (Foreign Direct Investment) in multi-brand retail is top priority," Acharia, leader of the CPI-M in the Lok Sabha, told IANS.

He said that the Left parties would meet November 16 to decide their strategy and could move an adjournment motion on inflation in parliament.

He said the Left parties also intended to raise the controversy surrounding coal block allocations and alleged favours to Robert Vadra, son-in-law of Congress president Sonia Gandhi, in land deals by the Haryana government.

"The issues include rise in prices of petroleum products, coalgate, problems faced by farmers and controversy about (land deals of) Robert Vadra," Acharia said.

With the government's decision to bring FDI in multi-brand retail being opposed by some allies of the United Progressive Alliance, Acharia said that they would talk to parties supporting the government.

Asked if they would talk to Samajwadi Party (SP) and Bahujan Samaj Party (BSP), whose support is crucial for the government's survival, Acharia said: "We will certainly talk to them."

He said SP and DMK leaders had spoken against the decision on FDI in multi-brand retail.

Prime Minister Manmohan Singh had last week reached out to SP chief Mulayam Singh Yadav and BSP supremo Mayawati.

The winter session of Parliament begins Nov 22.

The Bharatiya Janata Party is also opposed to FDI in multi-brand retail. The government had decided to allow FDI in multi-brand retail in September.


Since the growth story is not relevant to social responsibilities nor does it reflect the economic status of the starving mango public, the saga is used for active corporate lobbying. Hence, a majority of corporate honchos feel that reviving India's overall economic growth to seven per cent will be feasible in the next fiscal, a survey by industry body Assocham said today.According to Assocham's confidence Index, "After a subdued Diwali this financial year, India Inc will certainly see a sparkle in the festive season of 2013-14 on the back of manufacturing and exports returning to growth".The survey, which covered 171 Chief Executive Officers (CEOs), under the confidence from different sectors feel that it would take at least another 6 months for several segments of the industry to "repair" and "deleverage" their balance sheets before they march further on the growth path, it added.The confidence index was measured in the two weeks ending November 7 across different verticals, it said.Around 61 per cent of the CEOs felt that reviving overall economic growth to 7 per cent is feasible in the next fiscal. They also foresee bigger FIIs inflows into the Indian markets on the back of pick-up in domestic demand and the government at least partly succeeding in consolidating its finances.

Ironicaly,: Inflation probably accelerated to an 11-month high in October, likely adding to growing tensions between the government and central bankBSE 1.48 % as the economy looks set for its slowest growth in a decade.Dismal trade data on Monday and a surprise contraction in industrial production dashed hopes that the economy was regaining traction, and will likely heap more pressure on the government to boost growth by fast-tracking stalled reforms.It is also likely to bolster calls from the government and business leaders for the central bank to cut interest rates. But the central bank has so far rejected those calls, saying prices are still rising too fast to risk loosening policy.

A Reuters poll of 27 economists this week showed they expect wholesale prices rose an annual 7.96 per cent in October, compared with 7.81 per cent in September. Forecasts ranged from 7.40 per cent to as high as 8.20 per cent. The data is due around 0600 GMT on Wednesday.A hike in government-regulated fuel prices and ensuing higher transportation prices also significantly raised food prices, the poll showed. Most economists expect inflation to remain high before cooling off a bit early next year.

However,India will spend USD 1 trillion on infrastructure development in the country over the next five years and 40 per cent of it will come from the private sector, Kamal Nath, Union Minister for Urban Development and Parliamentary Affairs said recently..

`The Cabinet has approved an expenditure of USD one trillion in the next five years on Infrastructure Development and 40 per cent would come from private sector," he told members of the Indian Journalists Association at the India House.The minister was speaking after two rounds of meetings here with British investors in New Delhi.



The finance ministry is working on ensuring a smooth take-off of IDFs, a senior official told ET, adding that the move has been prompted by the ministry's plan to route pension and insurance savings into infrastructure projects at a time when banks and business houses have little room for fresh investments in the sector.While the department of economic affairs is steering the changes in investment norms for provident funds, the department of financial services has asked the insurance regulator IRDA to relax its restrictions on infrastructure investments by insurers.The finance ministry is in advanced talks with the labour ministry to allow provident funds (PFs) to invest in IDFs since retirement funds can act as a steady source of long-term, and more importantly, domestic funds.


The Finance Ministry is likely to notify the Rajiv Gandhi Equity Savings Scheme (RGESS), which is aimed at attracting retail investors to equity, within this week.

"The revenue department is likely to notify RGESS by Friday this week," a senior finance ministry official said.

Finance Minister P Chidambaram had already approved the scheme on September 21. He had indicated the revenue department would notify the scheme shortly and the Securities and Exchange Board of India ( Sebi) would issue relevant circulars.

The scheme, which was announced in this year's budget by the then Finance Minister Pranab Mukherjee, would provide a 50 per cent tax deduction on investments up to Rs 50,000 to investors whose annual taxable income is below Rs 10 lakh.

These investors can put in money through mutual funds and exchange traded funds and the investments would be locked-in for a total of three years.

The scheme would cover stocks listed under BSE 100, CNX 100 and Navratna, Maharatna and Miniratna public sector firms.

Investors will also be allowed to invest in follow-on-public offer (FPO) of such PSUs and initial public offering (IPO) of PSUs, with turnover more than Rs 4,000 crore, a move which is expected to give a push to the government's disinvestment drive.

The Centre aims to raise Rs 30,000 crore from stake sale in PSUs in the current fiscal. However, with seven months already over, no company has yet hit the market.

A proposal for a government panel chaired by Prime Minister Manmohan Singh to fast-track major infrastructure projects and boost a flagging economy seems to have stalled amid bickering between the finance and environment ministries over its powers, and an apparent reluctance to proceed without consensus.The dispute underscores the fears of investors and business leaders that New Delhi's new-found reformist zeal could be undone by a lack of governance and political will to drive further economic liberalisation.The brainchild of India's new finance minister, P. Chidambaram, the proposed National Investment Board (NIB) was expected to win swift passage through the cabinet last month. But it has yet to make it on to the weekly agenda.Investors and economists say the NIB should be a top priority for the government given the regulatory delays holding up projects worth nearly Rs 2 trillion ($36.8 billion) in the road, power, coal and mining sectors alone.

The government is very keen to opt for correction as the corporate India and MNCs want.

The labour ministry administers over Rs 5 lakh crore (nearly $100 billion) through the Employees' Provident Fund Organisation, which manages the retirement savings of nearly 60 million formal sector workers. At least another Rs 2 lakh crore is estimated to be managed by gratuity, pension funds run by India Inc and the new pension scheme (NPS) run by the Pension Fund Regulatory and Development Authority (PFRDA).

"We hope we will be on board for IDF investments," said Sanjay Kumar, EPFO's chief accounts officer and financial advisor. "Active negotiations are under way between the ministries of finance and labour to create a separate category for IDFs in our investment pattern," he said, adding that a positive decision could be expected soon.

Apart from creating a new window for infrastructure debt, the finance ministry is also trying to convince the labour ministry to raise the ceiling for PF investments in private sector bonds from 10% to 40%.

The secretaries of the two ministries are expected to meet separately on this issue later this month.

The EPFO follows an investment pattern notified by the finance ministry in 2003. In 2005, the finance ministry issued a new pattern that allowed 5% equity investments, raising this ceiling to 15% in 2008. Similar relaxations were made in the corporate debt window from 10% of PF portfolios in 2003 to 40% in 2008. But verbal sparring between the two ministries over equity investments prevented progress on reforming the other components of PF portfolios.

"The question now is - can we accept the 2008 (pattern) in parts, if our board of trustees is not ready to dabble in equities," said Kumar. He said the secretaries' meeting would look to resolve the issue of utilising the modified window of 40% for private sector debt, without adopting the equity aspect of the 2008 pattern.

Strict IRDA norms, which restrict life insurers' investments in an infra firm's debt to 20% of the investee firm's net worth, prevent players such as the Life Insurance Corporation of India from funding infrastructure projects. IRDA also requires that such bonds must have a minimum credit rating of AA with tenure of over 10 years.

"The IRDA norms really limit us, so funds are available but not getting channelled into infrastructure projects," said SadhanaBSE -4.92 % Dhamane, LIC's chief of investments, pointing to the global norm of mandating insurance funds to invest in long-gestation infrastructure projects.

"If the regulations are modified, we will invest more in the sector," Dhamane said, adding that infrastructure financing is also being hampered by risks on account of land acquisition, tardy clearances and implementation delays.

Economic affairs secretary Arvind Mayaram had said last Friday that his ministry was "actively" working towards issuing new investment guidelines for pension and provident funds.

While EPFO is open to the idea of IDF investments, the labour ministry is likely to ask the finance ministry to address some of its key concerns over investing in infrastructure. "I am a provident fund, not a hedge fund. Risk is not a one-time exercise in infrastructure financing," said EPFO's top finance officer.

If a project is implemented over five years and has a 30-year concession period, long-term investors such as PFs need a system to monitor it on an ongoing basis so that they are not "caught unawares", he explained, adding that placing a nominee director on IDF's board and ensuring 'exit options' for such investments would help inspire confidence among PF trustees.

FDI: BJP, Left oppose; DMK keeps suspense over support to govt

Refusing to give up on the FDI in multi-brand retail issue which could affect its core vote bank of small traders, the BJP on Wednesday said it will oppose the government decision in Parliament and try to build a joint strategy with NDA partners and other political parties. "BJP will
strongly oppose the government decision on FDI in multi-brand retail in the forthcoming winter session of Parliament. This decision is not in the interest of the country," party chief spokesperson Ravi Shankar Prasad said.

He announced that BJP will discuss its strategy with other NDA partners and also get in touch with political parties which have reservations on the issue.

The NDA allies are likely to hold a meeting on November 21, a day before the winter session begins.

"We would like to put the government on the mat on this issue. In November 2011, the then finance minister had announced in the Lok Sabha that a decision on FDI in multi-brand retail will be taken only after consulting all concerned sections. A similar statement was made by the then commerce minister in the Rajya Sabha," Prasad said.

The BJP charged this promise has been violated by the government as it has taken the decision unilaterally.

But the principal Opposition is not yet clear to what extent it will go against the government in Parliament.

Though the opposition claims to have support of majority of MPs in both Houses on the issue, the NDA is unlikely to press for a vote on the issue.

Asked if BJP and NDA would rally behind Mamata Banerjee's Trinamool Congress in case it seeks division of votes to embarrass the government, the party said it will decide its future course of action in the NDA meeting.


CPI-M to oppose FDI

In a bid to take on the government in Parliament on its decision to allow FDI in multi-brand retail, CPI(M) today said it has submitted notices in both the Houses seeking a discussion on the issue under rules entailing voting.

But the Opposition designs may be thwarted by the Chair in both Houses if it denies permission for a motion on the issue. Government has the right to bring FDI in multi-brand retail through an executive decision.

A discussion without voting is, however, possible.

"In both the Houses, the CPI(M) members have given the notices and we wish to take this up for a proper discussion under rules which will entail voting," senior CPI(M) leader Sitaram Yechury told reporters.

"Any such decision (allowing FDI in multi-brand retail) will have to be endorsed by Parliament and the government should not go behind the cover of saying that this is an executive decision," he said.

He said the government should take into account Parliament's decision if it wanted to go ahead as it was "supreme in our constitutional scheme of things."

While Yechury signed the notice in Rajya Sabha, his senior party colleague Basudeb Acharia sent the notice in Lok Sabha seeking that the two Houses reject the government's decision to allow FDI in multi-brand retail.

Rule 184 of Lok Sabha's Rules of Business and Rule 167 in the Rajya Sabha entail voting after discussion on a matter.

The decision to move such motions was taken at a meeting of the top-brass of the CPI(M), CPI, RSP and Forward Bloc here
on Monday.

BJP chief spokesperson Ravi Shankar Prasad said, "BJP will strongly oppose the government decision on FDI in multi-brand retail in the forthcoming winter session of Parliament. This decision is not in the interest of the country."

Prasad announced that BJP will discuss its strategy with other NDA partners and also get in touch with political parties which have reservations on the issue.

The NDA allies are likely to hold a meeting on November 21, a day before the winter session begins.

"We would like to put the government on the mat on this issue. In November 2011, the then Finance Minister had announced in the Lok Sabha that a decision on FDI in multi-brand retail will be taken only after consulting all concerned sections. A similar statement was made by the then Commerce Minister in the Rajya Sabha," Prasad said.

BJP charged that this promise has been violated by the government as it has taken the decision unilaterally.

But the principal Opposition is not yet clear to what extent it will go against the government in Parliament.

Though the opposition claims to have support of majority of MPs in both Houses on the issue, the NDA is unlikely to press for a vote on the issue.

Asked if BJP and NDA would rally behind Mamata Banerjee's TMC in case it seeks division of votes to embarrass the government, the party said it will decide its future course of action in the NDA meeting.

The Left leaders had then also decided to conduct a nation-wide mass campaign to collect five crore signatures, with party activists going from house-to-house to collect signatures in December and January.

The signatures would be collected on the demands for a universal public distribution system without dividing people into BPL and APL, supply of 35 kg of foodgrains at not more than Rs. 2 per kg which should be provided for in the proposed law on food security.

The Left parties have also opposed the cash transfer scheme in the PDS.


DMK keeps up suspense

Continuing the suspense over its stand on any Opposition-sponsored resolution in Parliament against FDI in retail, crucial UPA ally DMK today said its decision would be taken keeping in mind the interest of small and medium traders.

"Small and medium retail traders in Tamil Nadu are apprehensive that Foreign Direct Investment would greatly affect them. We would discuss and take a decision on this (FDI) keeping their interest in mind," DMK President M Karunanidhi told reporters.

To persistent queries on why DMK was maintaining a suspense on its stand over the FDI issue and whether it would support a no-confidence motion against the UPA Government, Karunanidhi, also a well-known screenplay writer, said: "I have written the script for more than 100 films. A film would be successful only if it has suspense."

When asked whether DMK would support Left parties and some other parties' proposed resolution with provision for voting in Parliament on FDI, he said the party's views would be made known after consultations with DMK Parliamentary Party members.

Karunanidhi had yesterday said DMK's stand on FDI in retail would be known when a Bill on it was brought before Parliament during the winter session beginning on November 22.

In case of voting, the support of DMK, the second largest UPA ally with 18 Lok Sabha MPs after the exit of Trinamool Congress, is crucial for the UPA.

DMK has opposed the Centre's decision to allow FDI in multi-brand retail sector and had even supported the nation-wide bandh called by various parties in September.

Karunanidhi had then said his party would support if the Opposition moved a resolution in Parliament against FDI in retail.

While Trinamool Congress chief Mamata Banerjee has threatened a no-confidence motion, the Left parties have decided to move motions under voting rules in both Houses of Parliament to reject government's decision on the issue.


Govt confident of facing FDI storm

Ahead of parliament's winter session starting Nov 22, the government on Wednesday said it "will cross the bridge" when required on the FDI issue.

"We will cross the bridge when we come to it," information and broadcasting minister Manish Tewari told reporters.

The opposition parties have threatened to protest over the issue.

"The Parliament session has not begun yet. The floor leaders of the various political parties are yet to meet. When the push comes to shove, we will not be found wanting," he said.

Congress spokesperson Abhishek Manu Singhvi said the party was not afraid of any debate in parliament.

"We are not afraid of any debate in Parliament," Singhvi told reporters.

He said the party had chosen the foreign direct investment (FDI) issue in public interest and had sought to clarify any misgivings related to it.

"But we don't want a debate with obstructions and ulterior motives," he said.