March 25, 2023

New Delhi. Government think tank Niti Aayog Suman Berry, vice-president of the National Pension System, expressed concern on Sunday over the re-introduction of the Old Pension Scheme (OPS) by some states. He said this would put a burden on future taxpayers at a time when India needs to focus on improving its fiscal position and promoting sustainable development.

Speaking to PTI, Berry underlined the need to increase capital expenditure and create scope for the private sector through fiscal consolidation. He said, “I am a little worried about the resumption of the old pension scheme. I think this is a matter of concern because its burden will not be on the existing taxpayers but on future taxpayers and citizens.

OPS was closed by the NDA government from April 1, 2004.
Under OPS, the entire amount of pension was given by the government, this scheme was closed by the NDA government from April 1, 2004. Under the New Pension Scheme, employees contribute 10 percent of their basic salary for pension, while the state government contributes 14 percent to it.

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Beri said, “Political parties should observe discipline as we all are working for the common goal of growth of the Indian economy so that India becomes a developed economy. It is necessary to balance short term goals with long term goals.

Many states have started OPS
Congress-ruled Rajasthan and Chhattisgarh have already decided to implement OPS while BJP-ruled Himachal Pradesh has promised to revive the scheme if voted to power. Jharkhand decided to start OPS and Aam Aadmi Party-ruled Punjab also recently approved the re-implementation of the scheme.

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RBI effectively limited the debt of the states
However, he said that the debt of the states has been effectively limited by the RBI, so there is no threat to economic stability due to the states. Berry said, “In the next 2 years, through financial strength, we will have to start making space for the private sector.”

Tags: NITI Aayog

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