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    India needs innovative pension fund products: Jayant Sinha

    Synopsis

    India needs to have innovative products and services under retirement architecture to match the risk appetite of various types of customers, Jayant Sinha said.

    ET Bureau
    NEW DELHI: India needs to have innovative products and services under retirement architecture to match the risk appetite of various types of customers, junior minister for finance Jayant Sinha said on Wednesday.

    “In National Pension System (NPS) you have the ability to invest in a wide variety of asset classes. I generally believe, with 30 years of compounding, small amount invested in NPS will over time overcome tax disadvantage,” he said.

    The pension sector has been demanding exemptexemptexempt (EEE) status for NPS which will mean that accumulated investment in pension schemes will not be taxable at the time of withdrawal.

    “I would not unnecessarily keep highlighting tax matters. When you sit down and do Monte Carlo analysis, you will find this becomes a matter of less significance,” said Sinha at an event organised by the Pension Fund Regulatory and Development Authority (PFRDA).

    Sinha also highlighted the role of pension funds as a source of long-term funds for infrastructure development and the need to have increased pension flows in the debt and equity markets to reduce volatility.

    PFRDA chairman Hemant Contractor said the pension fund regulator will take a view on G N Bajpai panel report that suggested investment into venture capital, in the next 2-3 weeks. The committee was set up to look into the issue of investment pattern of pension funds.

    Under the current norms, NPS funds can be invested only in government securities, corporate bonds and equities. At present, NPS has more than 87 lakh subscribers with total asset under management (AUM) of more than Rs 80,800 crore.

    PFRDA is readying itself along with banks to roll out the Atal Pension Yojana (APY), as announced by finance minister Arun Jaitley in the Union budget.


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