91 Lakh Employees and a Growing Debate
As per Dr. Manjeet Singh Patel, President of the ‘National Mission for Old Pension Scheme Bharat’ currently about 91 lakh NPS employees pays 10 percent of its monthly salary towards pension fund and government also contributes 14 percent of monthly salary towards pension. This has led to the development of discussion since the other opposition parties, which used to strongly support Old Pension Scheme (OPS) appear to have pulled back a bit.
Government’s Move: Implementation of Unified Pension Scheme (UPS)
At the centre, new pension scheme ‘’Unified Pension Scheme’ (UPS) has been proposed will be launched by the central government and is planned to be effective from April next year. Nevertheless, such an operation has been followed by massive resistance by employee unions which have embarked on a protest. Some organizations are yet to receive explicit notification in terms of their next line of action.
The Opposition’s Silence on Pension Schemes
A particular query which has emerged is why are the opposition parties which used to support the OPS now hesitant to come out in the open. The Congress Party for example has not come out with a public statement on the matter to make people question what is really behind such silence. Dr. Patel notes a possibility that the explanation of the possibility of attempting to fully restore OPS is just a ploy to get political support.
Exploring the Economic Implications of Bringing an End to NPS
According to Dr. Patel, continuation of the NPS did have financial implications which would follow its discontinuation. Since close to ₹ 12,000 crores are being invested every month into the NPS funds through LIC, UTI, SBI and any other entities, any termination of the scheme is set to destabilize the work of these companies.
Today the NPS is operating with ₹15 lakh crore corpus which may touch ₹50 lakh crore in near future. Returning to OPS could lead to a condition of deficit money of up to ₹5 lakh crore.
Future of Pension Schemes for Indian Employees
Dr. Patel proposes a potential solution: providing assured interest on the NPS contribution like GFPG while providing also the freedom to withdraw. This approach might help find the equilibrium between the motivation of employees and financial sustainability of governments. At the same time, is op as a response to the continued, and more particularly, the political, economic, and social implications of the reinstatement of ops itself a still unanswered.
