Pension reforms in India - Is it possible after debacle of 51% FDI in Retail

Indian has not yet seen the benefit of organized Pension Fund. What pension Fund can do to the life of the average Indian is cannot be imagined. Just like Privatization of Banking Industry change the way we do Banking, the way Privatization of Insurance sector change the landscape of the Insurance, Pension reform will change the life of the Indians. But Indians will have to wait long time. The initiative which the Government has taken for allowing 26% FDI in Pension sector is likely to face serious objection after the debacle in the retail FDI. It is an unfortunate situation for the Indian and the Indian Economy that we find lot of difficulties in building political consensus for each and every thing. The PFRDA which has been approved by the Cabinet need to be passed in the Parliament to legalize the Efforts that has been done relating to Pension reforms in India. Pension which is generally a right for Government & PSU & other government organization has already been contributory in majority of the cases since the year 2004. The proposed Pension Bill has also not specified minimum return in the Act. The government introduced the system in 2004 for all non-military employees recruited since January 2004, shifting from defined benefits to a defined contribution regime. The Pension Bill will help India as India still does not have a universal social security system. In a population of 1.2 Billion only 12% public in the organized sector are getting the Pension cover and a huge public is lacking any social security after retirement. Keeping in mind the growing part of public reaching old age a strong self sustained pension scheme is urgently required for India. Government can no more afford to serve pension keeping in mind the growing fiscal deficit of India. Huge part of annual Budget allocation is going to pay the pension holders. Pension reform would help bring millions more employees into pension plans. It would also channel investment into stock markets as well as long term assets, including the infrastructure sector.The government wants to ease rules for insurance and pension funds to allow them to invest in infrastructure, where there is demand for about USD 1 trillion in investment for the five years to 2017. The new pension system would also help federal and state governments cut their future liabilities, helping to rein in fiscal deficits.