Old Pension scheme: The former RBI governor said that going back to the old pension scheme would be a retrograde step, which would increase the pressure on the exchequer.
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Old pension scheme: Former RBI governor D Subbarao has given a big statement regarding the old pension scheme. He said that the decision of some states to restart the old pension scheme would be a retrograde step. With its implementation, the government employees will directly get the benefit of the general public’s money. The decision of some states to revive the old pension scheme (OPS) will certainly be a retrograde step. Former RBI governor D Subbarao said this.
He also said that OPS will give privileges to government employees at the cost of common people, while most of the general public does not have any special social security. Under OPS, employees get a fixed pension. An employee is entitled to receive 50 per cent of his last pay drawn as pension. The NDA government had decided to close OPS from April 1, 2004.
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Fixed amount is received every month under old pension
Subbarao said, “This will definitely be a retrograde step, both in terms of our commitment to fiscal responsibility and the credibility of our reforms.”
Under the New Pension Scheme (NPS), employees contribute 10 per cent of their basic salary, while the government contributes 14 per cent.
He said, “In a country where most people do not have any social security, government employees with fixed pension are privileged people.”
Subbarao said that if state governments revert to the old pension scheme, the pension burden will fall on existing revenues, which means less allocation for schools, hospitals, roads and irrigation.
The governments of Rajasthan, Chhattisgarh and Jharkhand have decided to restart OPS for their employees. He has told this to the Central Government / Pension Fund Regulatory and Development Authority (PFRDA).
Apart from this, Punjab, Jharkhand and Himachal Pradesh have also taken steps towards returning to OPS.
On India’s rising current account deficit (CAD), Subbarao said there were some concerns earlier this year, but the pressure has eased in the last few months. He said this was due to softening of commodity prices, which have come down by about 15 per cent from their high levels.
with language input