PFRDA has made progress; but lot remains to be done: Takru

The Secretary, Financial Services also pointed to the importance of a vibrant pension sector for the country to have options of long term funding sources

November 28, 2013 12:29 IST | India Infoline News Service
Rajiv Takru, Secretary (Financial Services), Ministry of Finance, delivering the Inaugural Address at the 1st CII Pensions Summit on Wednesday organized by CII emphasized the need for greater participation from the private sector to scale up the National Pension System on the foundation of providing safety and value for money for investors.
Commenting on the work by the PFRDA, Mr Takru said that the regulatory body has made progress, however, a lot remained to be done. He expressed hope that with statutory powers vested in the body, post the passage of the PFRDA Bill, the Authority would become an effective regulator and a developmental institution.
The Secretary, Financial Services also pointed to the importance of a vibrant pension sector for the country to have options of long term funding sources. Alluding to examples in Canada and the US, Mr Takru said that in India the options for funding sectors like infrastructure have limitations in terms of the tenure of funding. Therefore, the growth of a robust pension sector would provide the flexibility of tenure when it comes to financing sectors like infrastructure.
Responding to a point made on incentives for promoting the pension sector in India, Mr Takru said that the current levels of incentives are adequate. However, what is required is a mindset and a plan for revenue maximization, which would ensure that players in the field find the business sustainable.
Addressing the Summit, Sanjiv Bajaj, Co- Chairman, CII National Committee on Insurance & Pensions and Managing Director, Bajaj Finserv Ltd stated that the passage of PFRDA Act has provided the much needed policy push to the Indian pension sector and has opened up the avenue to enter its most crucial phase of growth and evolution.
Mr Bajaj further added that the stage is set for better governance of retirement plans in India and boost people’s confidence that their contributions in pension plans will be professionally managed. Further, the FDI permitted through the PFRDA Act 2013 is expected to help in bringing appropriate global practices to India.
In his theme presentation, Abizer Diwanji, Partner & National Leader - Financial Services, EY India stated India’s pension business has immense potential to grow due to the fact that a large segment of its population has no access to a retirement fund. He further highlighted the importance of pension funds in supporting funding of long-term infrastructure projects, bring stability in capital markets and help its elderly population to be financially independent.

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