Karnataka Chief Minister Siddaramaiah has indicated that the demand of government employees to revert to the Old Pension Scheme (OPS) — which was partially promised by the Congress ahead of the recent state Assembly polls — will be discussed at the next Cabinet meeting. The CM also indicated on Tuesday that an announcement on the OPS will be made in the new budget, scheduled for July. He issued the statement after speaking to a delegation of government employees, who are demanding the cancellation of the New Pension Scheme (NPS) for government employees. Former MP V S Ugrappa, who was present at the meeting, said that as of now, 2.98 lakh government employees are covered under the NPS, and that instead of pension amounts being deposited in the central securities depository, the National Securities Depository Limited (NSDL), an option could be depositing the same in a provident fund accessible at the time of retirement. He also said the state should drop disciplinary action against government employees who took part in the Vote for OPS campaign during the recent Assembly elections. "The NPS has been cancelled in Rajasthan and Chhattisgarh, it should also be cancelled in Karnataka, and the OPS should be implemented. With the cancellation of the NPS, Rs 19,000 crore would become available under the scheme, which can be used for development programmes,” said Karnataka NPS employees' union president Shantaram Teja. In its manifesto for the May 10 elections in Karnataka, the Congress had promised "to sympathetically consider extension of the OPS to pensionable government employees who joined service since 2006". The Congress promise, to consider reverting to the OPS, is believed to have been a key factor in swaying the state's sizeable number of government employees to support the party in the 2023 Assembly polls. Since the Congress victory in the polls, government employees have been demanding that the state revert to the OPS, through pleas made in newspapers and to key leaders like CM Siddaramaiah and his deputy, state Congress president D K Shivakumar. Although there is no formal announcement of a return to the OPS, Karnataka Congress leaders have given several hints that there would be a change in policy — including the assurance given by Shivakumar that his party is on the side of government employees, during a December 2022 protest in Bengaluru demanding OPS. He had also said the issue was being discussed at the highest levels in the party. “Many of you have been protesting since 2004. You have a right to protest. The government is looking at the pension scheme with a business mindset. There is no rule that says the policies of previous governments can't be changed. The government needs funds. It must collect revenues and work to create an equitable society. As politicians, we must adopt a policy of live and let live. This is the policy of the Congress,” Shivakumar had said. Shivakumar had also said, “I will not make any announcements on this issue. Our party has already decided on it in some states. Our government in Rajasthan has already made an announcement in this regard. We have to consult the Rajasthan government. We are also looking at how we can overcome the economic fallout of a change in the policy.” Congress leaders who are privy to discussions within the party, say the party believes the OPS should be implemented in some form in Karnataka, while keeping the overall financial burden and economic interests of the state in mind. According to the state finance department, pension payments in Karnataka rose from Rs 5 crore in 1970-71 to a high of Rs 2,157 crore in 2004-05, when the NPS was introduced. “The average annual growth rate in pension payments for the past 40 years has been as high as 21%, which indicates that the pension liability is increasing significantly,” the finance department had said in 2006, during the introduction of the NPS. The 2004-05 pension cost (Rs 2,157 crore) was 8.2% of Karnataka's revenue receipt of Rs 26,162 crore. According to CAG audit data, the actual pension cost in 2022, Rs 19,216 crore, was 10% of the state's revenue receipts of Rs 1.95 lakh crore, a 2% increase over fiscal 2020-21.
