Eyes fixed on poll-bound Gujarat, Himachal, Mann says may restore old pension scheme

The announcement was immediately hailed by AAP national convener and Delhi Chief Minister Arvind Kejriwal. “Wow! A great decision. All govt employees across India want old pension scheme to be restored,” Kejriwal tweeted.

Restoration of the old pension scheme, which was discontinued in 2004, has been one of the major demands of the government employees in Punjab too. In August last year, party leader Harpal Singh Cheema, who is currently the Finance Minister, had promised to restore the old pension system if the party was voted to power in Punjab.

Punjab Civil Secretariat Staff Association chairman Sukhchain Singh Khaira welcomed the chief minister’s announcement and said the state government employees have been struggling to get the old pension system restored.

Experts and economists, however, said restoring the old pension scheme will be disastrous move for the state even though eventually it may fill the coffers for the time being. They said implementing the OPS would not be a cakewalk. Under the national pension scheme (NPS), the employees pay 10 per cent of their salary towards pension fund while the government pays 14 per cent. The amount is then deposited with Pension Fund Regulatory and Development Authority (PFRDA). If the government goes ahead and implements OPS, it would have to withdraw the money from the authority. However, the fund is protected by a lock-in period. If it is withdrawn in advance, then authority’s approval is required which may not be easy.

An expert termed the move a “political decision” stating that it may help AAP politically and the state financially as if the PFRDA permits the government to withdraw the fund. “This could see the government coffers filling, but things will worsen after 2034, when the employees, recruited in 2004 and later, start retiring. That time the state would require money to pay the pension under OPS as 50 per cent of last drawn salary,” the expert said.

Meanwhile, in an official statement, Mann said he has asked chief secretary VK Janjua to explore the feasibility and modalities of implementation of the scheme that is likely to give major relief to the employees of the state.

Reiterating the firm commitment of his government to ensure wellbeing of the employees, Mann said that no stone will be left unturned for this noble cause. He said that employees are the backbone of the government and every effort will be made to ensure their welfare.

Mann said his government had already taken several “path breaking pro-employee initiatives in last few months”. He said that his government has introduced policy for the regularisation of the contractual employees in the state. Mann further said his government has also started a major recruitment drive so that the youth can get jobs on one hand and performance of various government departments can be optimised by overcoming shortage of staff on the other.

The debt-burdened Punjab had done away with the OPS in 2004 when Capt Amarinder Singh was the chief minister. Amarinder had also done away with free farm power but had to revert his decision after political backlash.

Punjab already has a fat annual pension bill of Rs 11,000 crore. The bill would go up after the old pension scheme is implemented. The state already has a debt burden of Rs 2.63 lakh crore. It also has a burgeoning bill of power subsidy at Rs 18,500 crore. The AAP government has only recently doled out 300 free units of power every month, thereby burdening the state exchequer further.