States should consider Fiscal, economic implications of move to old pension scheme: FM

It would be too simplistic to assume that the demand for Old Pension Scheme would be the central issue on which the state elections of 2023 and the Lok Sabha election of 2024 would be contested.

Finance Minister Nirmala Sitharaman has asked states to consider the fiscal and economic implications of moving to the old pension scheme.

There has been an active debate with several states including Rajasthan, Chhattisgarh, Jharkhand, Punjab, and Himachal Pradesh on moving towards the re-implementation of the Old Pension Scheme. The Maharashtra Deputy CM Devendra Fadnavis has also recently said that the state government is “not negative” about the Old Pension Scheme (OPS).

“We need a complete understanding of financial implications and health of not just today but future decades. If we (switch), without adequately looking into what it (returning to the old pension scheme) means, we will be paying the current generation of pensioners by loading (the burden) onto the future generations,” the FM said in an interview with Network 18.

The National Pension Scheme was implemented in 2004 by the BJP-led NDA government at the Centre to cut mounting pension bills. Under NPS, the government and employees have to contribute 10 and 14 percent of their salary, respectively, towards a pension fund. Under the old pension scheme, government employees used to get a guaranteed pension.

“Who implemented it for the first time? The political dispensation which brought this in was not just NDA. UPA actively brought it forward,” she added.

Read more: Old Pension Scheme not a gamechanger for 2023 assembly polls or 2024 Lok Sabha elections