Economic Survey pitches for pension reforms

While pension reforms refuse to make headway in the wake of political opposition, the survey has made a strong case for bringing about a vibrant pension sector in the country and has said that it would be a "highly beneficial force" in the financial system.

"Pension funds are natural vehicles for long-term investments, including equity. A modern, well-regulated pension sector, populated with professional pension fund managers will be a highly beneficial force in the financial system and improve resource flow in the form of long-term debt and equity to sound projects particularly in infrastructure," the survey said.

The Government had notified the New Pension System (NPS) on January 1, 2004, but has not been able to push ahead with a proposed legislation to bring about pension reforms in the wake of the Left parties expressing reservations over the fallout of such a system on the general public.

Insurance sector

The survey feels that pensions reforms could also benefit the insurance sector. "The pension sector can also be a major customer of insurance companies for the purpose of converting a stock of pension wealth at retirement date into a flow of monthly pension in the form of annuities," it said.