Greece, India, China & Thailand show greatest need for pension reform

The Allianz Global Investors Pension Sustainability Index showed that Greece is under the most pressure to reform

According to a study conducted by Allianz Global Investors Greece, India, China and Thailand show the greatest need for pension reform, though for different reasons. Increased levels of sovereign debt following the financial crisis have exacerbated the need for reform in many countries. Australia, in contrast, is ranked as the best prepared followed by Sweden, Denmark, New Zealand and the Netherlands.  

The Allianz Global Investors Pension Sustainability Index, which tracks the relative sustainability of national pension systems in 44 countries around the world, showed that Greece is under the most pressure to reform. Despite pension reforms initiated as a condition of the austerity packages from the International Monetary Fund (IMF) and European Central Bank (ECB), the retirement age in Greece is still low and public replacement rates (the percentage of a worker’s pre-retirement income paid out by the pension system upon retirement) are too high. However, the greatest challenge facing the Greek pension system is that its old age dependency ratio–the ratio of elderly people to people of working age–is well above the European average.

In contrast, in India and China, the issue is that pension coverage remains extremely low and adequate measures have not yet been implemented to improve this. Thailand takes the fourth ranking as it has sporadic pension coverage and an extremely low retirement age (55 years of age).

In Asia, comprehensive pension systems remain the exception rather than the rule and increasing the coverage of the pension system is still a challenge. The rankings of Asian countries in the Index have not changed significantly compared to earlier studies as they escaped the worse of the financial crisis and have experienced only minor increases in their debt to GDP ratio.

The Pensions Sustainability Index (PSI) analyses the current and future prospects of national pension systems looking at variables such as demographic developments, public finances and pension system design to capture in one figure the need for further pension reform.

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2G case: CBI may file charge-sheet against some Essar officials

Attorney general GE Vahanvati has endorsed the stand of CBI director AP Singh for filing a charge-sheet against some of the officials of the Essar group for allegedly entering into a criminal conspiracy for securing 2G spectrum and also suppressing information

New Delhi: The Central Bureau of Investigation (CBI) may file a charge-sheet against some officials of Ruias-led multinational conglomerate Essar in the second generation (2G) spectrum case, a move for which attorney general GE Vahanvati has given his nod, reports PTI.

The CBI has claimed that Essar had more than 10% of cross-holdings in Loop Telecom which was against the norms, a charge denied by the two companies.

Sources privy to the development said that the attorney general (AG) has endorsed the stand of CBI director AP Singh for filing a charge-sheet against some of the officials of the Essar group for allegedly entering into a criminal conspiracy for securing 2G spectrum and also suppressing information.

The final decision in the matter would be taken by the CBI director after taking into account the opinion of the AG, its own prosecution director and Ministry of Corporate Affairs, which had said that Essar had less than 3% of shares in Loop Telecom, they said.

Essar has maintained that it had adhered to the rules and complied with the telecom guidelines.

The sources said CBI, whose stand has been backed by the AG, may file its last charge-sheet against some members of Ruia family and other officials of the Essar group for suppressing facts.

The CBI had approached the country’s top law officer after its prosecution department differed with its findings on cross-holding of shares of Essar in Loop Telecom in connection with the 2G scam, contending there is no ground for a case against it, the sources said, maintaining the agency has not the report so far.

The opinion of the agency’s Department of Prosecution (DoP) was similar to the one given by the corporate affairs ministry, which had given a clean chit to Essar, saying its shareholding pattern was 2.15%, less than the mandatory 10% when 2G licence was granted, they said.

The CBI, however, has alleged that the cross-holding of shares of Essar in Loop Telecom was over the prescribed 10%, a charge denied by both the companies.

The Registrar of Companies (RoC) in Mumbai has said, “The Essar Group, directly or indirectly, held only 2.15% of Loop Telecom as on 3 September 2007, i.e. the date on which the application was made to DoT for UAS licence.”

The RoC letter also said that the documents of the company do not substantiate ‘Associate’ relationship between “Essar Group and Khaitan Group” as alleged.

Several officials of the companies, including Prashant Ruia, have been quizzed by the CBI at length ever since the agency started its probe in the case.

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4% agri growth will check inflation in 12th Plan: Plan panel

The Planning Commission is aiming at 4% farm growth in the 12th Plan (2012-17), the same level targeted in the 11th Plan (2007-12). Plan panel member Abhijit Sen suggested that growth in production of foodgrain has been satisfactory, but the country needs to improve production of other crops, including pulses and oilseeds

New Delhi: The Planning Commission today said 4% growth of the agriculture sector is required to keep a check on inflationary pressure in the 12th Five Year Plan beginning April 2012, reports PTI.

“During the 11th Plan, we will have 3.3% to 3.5% agriculture growth... short of (targeted) 4%... In a sense, inflation shows that this is simply not enough (to tame price rise)," Planning Commission member Abhijit Sen said here while addressing a conference on agriculture.

Mr Sen also suggested that growth in production of foodgrain has been satisfactory, but the country needs to improve production of other crops, including pulses and oilseeds.

The Commission is aiming at 4% farm growth in the 12th Plan (2012-17), the same level targeted in the 11th Plan (2007-12).

Mr Sen’s statement is significant in view of persistently high inflation, particularly in food items. The government has come under severe attack as inflation is hovering close to the double-digit mark.

Inflation for the month of September stood at 9.72% and food inflation in the country touched a nine-month high of 12.21% in the week ended 22nd October on the back of costlier vegetables, pulses and milk.

About supply side constraints fuelling food inflation, he said, “The supply side constraints are not worse than they were.”

Earlier last month, finance minister Pranab Mukherjee had said, “The current inflation pressures are mainly because of supply side constraints of agricultural products.”

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