Find less costly ways to address pension concerns instead of OPS, says Raghuram Rajan


PTI, Mar 6, 2023, 8:47 PM IST

Image credit: PTI / File

New Delhi: Former RBI Governor Raghuram Rajan has expressed his concern over the decision of some states to restart the old pension scheme and suggested that some less costly ways should be found to address the demands of government pensioners.

Rajan further said the old pension scheme does involve massive future outlays because of the indexation of pensions to current salaries.

”This is an enormous obligation, not necessarily in the short run, but in the long run,” he said, adding obviously, state governments have to think through the long-term implications for government finances, and whether civil servants are the most in need of help among the constituencies they deal with.

Rajan, currently Katherine Dusak Miller Distinguished Service Professor of Finance at The University of Chicago Booth School of Business, said as he understands it, it may be infeasible technically or legally to move back to the old pension scheme.

”If so, there may be less costly ways of addressing the concerns that prompt such moves,” Rajan told PTI in an email interview.

In a major move, a select group of central government employees have been given a one-time option to opt for old pension scheme.

The employees who joined the central government services against posts advertised or notified before December 22, 2003, the day National Pension System (NPS) was notified, are eligible to join the old pension scheme under the Central Civil Services (Pension) Rules, 1972 (now 2021).

Under Old Pension Scheme (OPS), employees get a defined pension. An employee is entitled for a 50 per cent amount of the last drawn salary as pension.

OPS was discontinued by the NDA government in 2003 with effect from April 1, 2004.

Under the new pension scheme (NPS), employees contribute 10 per cent of their basic salary towards pension while the government contributes 14 per cent.

Governments of Rajasthan, Chhattisgarh and Jharkhand have informed the central government/ Pension Fund Regulatory and Development Authority (PFRDA about their decision to restart OPS for their employees.

The government of Punjab on November 18, 2022, issued a notification regarding implementation of OPS for the state government employees who are being covered under NPS. Jharkhand too has decided to revert to OPS.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Let truth come out: Kharge on Oppn demand for discussion, JPC on Adani issue

Karnataka CM directs officials to submit proposal for gold chariot for Goddess Chamundeshwari

IPL Auction 2025 | GT buy Washington Sundar for Rs 3.20 crore; Shaw, Shardul go unsold

Virat Kohli doesn’t need our support, but we need the support of Kohli: Bumrah

INDIA bloc seeking JPC probe into Adani ‘scam’, govt scared of debate: Congress after LS, RS adjourned

Burglars decamp with cash Rs 1 crore, 300 gold sovereigns from house in Kerala

Raut demands re-election, alleges irregularities in EVMs during Maharashtra polls

Related Articles More

Air pollution: SC directs action against officials for ‘serious lapse’ in ensuring GRAP-IV curbs

PM Modi to attend 3-day all-India security conference in Odisha from Nov 29

Let truth come out: Kharge on Oppn demand for discussion, JPC on Adani issue

Need to link co-op movement with circular economy: PM Modi

RSS mouthpiece Organiser had attacked Constitution: Jairam Ramesh

MUST WATCH

Coconut Flower

Prakash Belawadi

Naxal Leader Vikram Gowda

Christmas Cake Fruit Mixing

DK Shivakumar


Latest Additions

Air pollution: SC directs action against officials for ‘serious lapse’ in ensuring GRAP-IV curbs

PM Modi to attend 3-day all-India security conference in Odisha from Nov 29

Let truth come out: Kharge on Oppn demand for discussion, JPC on Adani issue

Need to link co-op movement with circular economy: PM Modi

Karnataka CM directs officials to submit proposal for gold chariot for Goddess Chamundeshwari

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.