Will Budget 2024 resolve NPS's pension issue?

The ongoing uproar over the pension system for government employees could come to an end next month. In fact, there is a possibility that a status report on the National Pension System (NPS) will be presented in the interim budget on February 1. The group headed by Finance Secretary TV Somanathan has reviewed this plan and in all hope, the report will be submitted by the end of this month. According to sources, some changes can be made, keeping in mind the concerns of pensioners regarding NPS.

Most government employees have demanded the revival of the old pension scheme (OPS). In this, employees get 50% of their last salary as pension. Last year, Rajasthan, Chhattisgarh, and Himachal Pradesh revived OPS. Tamil Nadu and West Bengal had already supported bringing back of the OPS. Whereas, from January 1, 2004, NPS was implemented for all central government employees. The central government says that OPS puts a heavy burden on the government treasury, which is why it was removed. RBI and many economists have also opposed its reimplementation. They say that this step will distrupt the financial condition of the states.

It should be noted that last year in April, a panel was formed to review the NPS’s pension issue for government employees. The committee was asked to suggest ways to improve NPS pension benefits, keeping in mind the financial considerations. Its report will be presented in the budget. The panel has considered some changes and guarantees on NPS in discussions, but it is not in favor of reviving the old pension scheme. However, the center can take advice from the public before taking any action.