The New Pension Scheme

Bhubaneswar: The government of India has announced that there is going to be a new pension scheme implemented along with the National Pension Scheme  ( NPS) 2004. This United Pension Scheme ( UPS) can be thought as a consequence of the ongoing politics that has been associated with the pension scheme from the last a couple of years. Although the government has stated that the government employees are totally free to choose whether they want to opt for the new pension scheme or stick to the previous one. During their election campaign BJP had promised that if they come back to power the Old Pension Scheme will be back to action all across the country. This announcement was based on the work of a committee headed by the person who was the finance secretary in the second term of the Modi government and the cabinet secretary in the present term of the government. In terms of the facilities both these pension schemes provides are almost looks the same. In both these schemes, a minimum guaranteed pension amount is provided along with a family pension system and during the time of superannuation the employees are eligible for withdrawal of the half of the amount of their salaries. It would be wrong to think that the current announcement is going to create a positive impression politically among the government employees and their families, and the young aspirants who are awaiting for any government jobs.

The pension system has been at stake due to various factors like contributory, market related issues, insurance system by the government treasury, census matters and many others. According to the  Reserve Bank of India, the budget allocation for different states and union territories in 2023-24  was 5,22,105.4 crores which is the 6-21 percent of the total revenue generation. The pension holders claim that it is their late wages. It also can be argued that pension getting drawn from the government treasury indicates the funds saved for the future generations are getting spent. Recently, many sate governments are working on contract basis to avert financial crisis. The central government as well has created a new scheme like the Agniveer for an important field  like military services. The hike of pension bill in a rapid pace is the major factor behind this step. Many government vacancies are left unrecruited which is majorly impacted by the financial crisis the government face because of the pension burden. All these steps leads to two paths, firstly it affects the capability of the nation adversely and secondly, it reduces the hope for the young generations to get employments in any government jobs. The market inclusive New Pension Scheme was run by an NGO which was operated during the growth of stock Market. After two centuries, the employees under the NPS scheme started to retire , the one who joined after 1st January, 2004, got comparatively very less amount of pension than they would have got in the old pension scheme.

Through the  current announcement by the government, it seems to be implemented all these payments by investing the NPS or UPS corporation in the financial markets. It is to be seen whether the experts and the government itself will continue to be comparing between the investment of  NPS and the UPS and will work as a mediator between the appropriate set of amount paid to the retired employees and the interests from the investments . The best experts and brains should be deployed for this task.