THE CABINET of the new Congress government in Himachal Pradesh Friday cleared the decision for its employees to revert to the Old Pension Scheme (OPS) with Chief Minister Sukhvinder Sukhu saying the party has fulfilled a key election promise. Himachal becomes the third Congress-ruled state after Rajasthan and Chhattisgarh to announce such a move. The decision comes days after the state government increased the value added tax (VAT) on diesel from six per cent to 9.96 per cent per litre - taking the price from Rs 83 to Rs 86 per litre and prompting the Opposition BJP to claim that the hike was part of a bid to generate funds for the OPS shift. According to officials, the state government is set to spend between Rs 800-900 crore for the first year of OPS implementation. Speaking to reporters Friday after the Cabinet meeting, Chief Minister Sukhu said, “The state government has decided to implement OPS from the point of view of social security and humanity. Affordability of OPS expenditure will be achieved through financial discipline and cutting down on expenses, and the government believes that there is no such thing that cannot be done.” He said, “We told people from the very beginning that their voices will be heard. It was our promise that we will bring back OPS and the day has come. The notification will also be issued. This is the first of many steps in the coming times, which will show that the Congress party is committed to the benefit of the state. We have the necessary willpower to make big decisions.” The move is aimed at over 1.36 lakh state employees who are currently covered by the New Pension Scheme (NPS). Under the OPS that was discontinued by the Central Government in 2004, government employees got 50 per cent of their last earned pay (basic salary plus dearness allowance) as pension on retirement. Under the NPS, funds are contributed by both employees and the government towards pension. The move by states to revert to OPS has been questioned by several experts who have warned that it will create open-ended liabilities for future governments. Besides, the Centre and pension regulator PFRDA have maintained it would not be possible to return the money deposited so far in pension funds under the NPS back to state governments. On Friday, Sukhu said the Centre has over Rs 8,000 crore from the share of NPS employees. Last month, the Congress government in Chhattisgarh had decided that employees can shift back to OPS after making a submission to deposit the contribution made by the state towards the NPS and the dividend earned thereon. During visits to Himachal, AICC observer and Chattisgarh Chief Minister Bhupesh Baghel had reiterated that OPS has been implemented in other Congress states and that there is financial viability to implement the scheme. “We have asked the Centre to specify the reason for not providing funds. Another aspect is that people can withdraw their share as has happened in Rajasthan. The policy is about political will,” Baghel had told The Indian Express. In Himachal, the OPS was one of the ten guarantees listed by the Congress in the run-up to the state polls. The BJP, however, was silent on OPS in its election manifesto. The latest decision comes against the backdrop of the delay in Cabinet expansion, with questions raised about the Congress fulfilling its promises. On the other poll promises of creating 1 lakh jobs and providing Rs 1,500 each to women in the age group of 18-60 years, the Himachal Cabinet decided to form sub-committees to come up with a roadmap for implementation. According to the government, the previous BJP government had allegedly left the state in debt for more than Rs 75,000 crore, including liabilities and arrear payments. In Friday's meeting, the State Cabinet also expressed gratitude to Congress president Mallikarjun Kharge and senior party leaders Sonia Gandhi, Rahul Gandhi and Priyanka Gandhi “for their leadership and efforts”.
