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Reforming provident and pension fund regulation in India

Mukul G. Asher, Amarendu Nandy

Journal of Financial Regulation and Compliance

ISSN: 1358-1988

Article publication date: 1 July 2006

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Abstract

Purpose

To examine the case for reforming India's current provident and pension fund governance and regulatory structures.

Design/methodology/approach

The paper reviews various components of India's social security system with a view to identifying reform needs in their governance and regulatory structures. It then assesses the new pension system to be supervised and regulated by the proposed Pension Fund Regulatory and Development Authority (PFRDA).

Findings

The paper finds that the current arrangements do not provide sufficient incentives for professionalism and system‐wide perspective essential to meet India's social security challenges. Urgently operationalizing the PFRDA, and modernizing the relevant laws and regulations could greatly assist in meeting India's social security challenges. Modernization of Employees Provident Fund Organization is also essential.

Research limitations/implications

The analysis suggests that the need for greater professionalism and system‐wide perspective should be accorded high priority by India's provident and pension fund organizations. The analysis in the paper is quite aggregative and qualitative. This underscores the need for more robust database and greater focus on empirical evidence‐based policies in this area.

Originality/value

The paper will provide a better appreciation of the governance and regulatory issues involved in reforming India's provident and pension funds. It will also provide a base for other researchers to identify and undertake more detailed analysis of specific aspects such as ways to internationally benchmark administration and compliance costs of provident and pension fund organizations; achieving coordination among PFRDA, banking, insurance, and capital market regulators.

Keywords

Citation

Asher, M.G. and Nandy, A. (2006), "Reforming provident and pension fund regulation in India", Journal of Financial Regulation and Compliance, Vol. 14 No. 3, pp. 273-284. https://doi.org/10.1108/13581980610685865

Publisher

:

Emerald Group Publishing Limited

Copyright © 2006, Emerald Group Publishing Limited

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