The government may increase the FDI limit in the pension sector to 74 percent. Sources say that a bill in this regard can be brought in the monsoon session of Parliament. The amendment to increase the FDI limit in the insurance sector from 49 to 74 percent has been approved by Parliament only last month. The Insurance Act, 1938 was earlier amended in 2015 to raise the FDI limit to 49 percent. This brought foreign investment of Rs 26,000 crore in this area in five years.
Sources said that a proposal for amendment to the Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013 can be brought in the monsoon session or winter session. Through this, the FDI limit in the pension sector will be increased. At present, the FDI limit in the pension sector is 49 percent. Sources said the amendment bill may also have a provision to separate the National Pension System (NPS) Trust from the PFRDA.
The powers, functions, and responsibilities of the NPS Trust are currently decided under the PFRDA (National Pension System Trust) Regulations, 2015. It can be brought under Paramarth Trust (Charitable Trust) or Company Law. The intention behind this is to separate the NPS Trust from the pension regulator and manage a competent board of 15 members. Most of these members will be from the government including the states, as it is their biggest contribution. The PFRDA was established with the objective of promoting methodical development in the pension sector. It is also the responsibility of protecting the interests of members of pension schemes.
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