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Government bullish on pension sector growth
India News, Rediff Mumbai
September 9, 2003
The pension sector is expected
to become the largest financial sector in India in the next five years and
there will be a separate law for the sector, a top finance ministry
official said on Tuesday.
"Over the next 3-5 years,
the pension sector will be the largest sector in the country," U K
Sinha, joint secretary (capital markets and pension), said at a seminar
organised by the Associated Chambers of Commerce and Industry in New
Considering the importance of
the sector, there would be a separate law governing pension funds.
However, he did not specify as to when it would be in place.
Pension funds would be allowed
to invest overseas also and there would be minimal restrictions on
investment strategies of the fund managers, he said.
The move to open up pension
sector follows suggestions from Old Age Social and Income Security report,
which suggested that there should be defined contribution scheme in place
of defined benefit scheme considering the mounting pensions liabilities of
The Union Cabinet had recently
approved setting up of the Pension Regulatory and Development Authority
and contributory scheme for the government officials to start with.
Sinha had earlier said the
appointment of an interim pension regulator and the launching of the new
contributory pension scheme were expected within five months, through
which about 55,000 government employees were expected to join the scheme,
even as Labour Minister Sahib Singh Verma expressed concerns on several
provisions in the proposed scheme.