Ahead of the Lok Sabha and Maharashtra Assembly elections, the 14-year-old Old Pension Scheme (OPS) has come back to haunt the ruling alliance in the state, with growing demands for its restoration. It has also prompted U-turns by leaders cutting across party lines. What has made the situation more tricky for the ruling alliance, comprising the BJP, Shiv Sena (Eknath Shinde) and NCP (Ajit Pawar), is the Narendra Modi government’s statement in Parliament on Wednesday that it will not revert to the OPS. The Opposition has been using the protests to corner the Eknath Shinde government and turn the anger of the protesters to its advantage in the ongoing Winter Session of the Assembly and Council. The Shinde government, fearing a backlash from the 17 lakh-odd government employees, has gone the extra mile to assure them and has said the demand would be carefully considered before the Budget Session of the Assembly, scheduled for March next year. The ruling alliance is also aware that antagonising any section of society ahead of next year’s elections would dent its electoral prospects. Government employees have taken to the streets across the state demanding the restoration of OPS. Protests are being held in Nagpur, Nashik, Ahmednagar, Chhatrapati Sambhajinagar, Pune and other places. In a bid to corner the ruling alliance in the state, Shiv Sena (UBT) chief Uddhav Thackeray, while addressing one such protest in Nagpur on Tuesday, said such a situation would not have arisen if the Maha Vikas Aghadi (MVA) government was in place. However, for neither the MVA nor the current ruling dispensation, has the restoration of OPS been a priority. The issue has come up for discussion several times in multiple Assembly sessions since 2020 but no government, fearing long-term financial implications, has committed to it Changing stance Ajit Pawar, as finance minister in the previous MVA government, had said in March 2020 that the decision to shift from the OPS to the new one was taken consciously by the Centre and state government. “There is no reason to revert to the OPS,” he had said. Just over three years later, Ajit on Tuesday said the government will consider the protesting employees’ demand. While most leaders admit that reverting to the OPS would put additional burden on the exchequer, which is already reeling under financial stress, it is unlikely that any party or leader will outrightly reject the demand ahead of the polls. Deputy CM Devendra Fadnavis too has softened his stand on the issue. In December last year, he had said in the Assembly that the OPs would put an additional burden of Rs 1.1 lakh crore on the treasury. “The government cannot take hasty decisions and the financial implications cannot be overlooked,” he had said as the Opposition MVA agreed. However, a month later, the MVA used the OPS as a poll plank against the ruling alliance in the Legislative Council elections, which were held for two Graduate constituencies in Nashik and Amravati, and three Teachers constituencies in Nagpur, Chhatrapati Sambhajinagar and Konkan. During the campaign for the MLC elections, the MVA promised the reinstatement of the OPS, prompting the ruling alliance to change its stand. “I wish to clearly state that we (ruling alliance) are not averse to the implementation of the OPS and will discuss it with the finance department. The solution to this issue has to be long-term. Moreover, if anyone can restore the OPS, it is only the BJP,” Fadnavis had said at a public meeting in Chhatrapatri Sambhajinagar. However, the assurances did not pay off and the BJP lost two – Nagpur Teachers constituency and Amravati Graduates constituency – crucial seats in the elections. The Congress too has seen its leaders do a flip on the issue. State Congress president Nana Patole has backed the protesting employees, saying there is nothing wrong if the employees believe that the OPS is their right. “If they are committed to their demand, we as the Opposition are bound to support them. How the government manages finances to restore the OPS is their responsibility. The Congress stands by farmers, employees and workers in the unorganised sector. Moreover, the decision to move out of the OPS was taken by the NDA government in 2003,” he said. Leader of the Opposition in the Assembly Vijay Waddetiwar has asked why the government is complaining about expenditure with regard to serving employees and farmers. Maharashtra has earmarked Rs 1.44 lakh crore in 2023-24 fiscal for salaries of government employees while the amount was Rs 1.28 lakh crore and Rs 1.07 lakh in 2022-2023 and 2021-2022 respectively. For pensions, the government has an outlay of Rs 54,737 crore for the 2023-2024 while it had earmarked Rs 46,614 crore and Rs 38,513 crore for the previous two fiscals. Call for negotiation Leaders of the ruling alliance have agreed to hold talks with employee organisations on the issue. “It is my ardent appeal to employees and their organisations to withdraw their strikes. The state government is willing to look at the OPS issue positively. By stopping work, employees are causing inconvenience to people,” Fadnavis has said. The government has also requested protesting employees to resume work saying they would retire only in 2032 and there was a lot of time to discuss the issue. Employee organisations argue that the OPS provides financial security as it offers more benefits as against the new system, which is market linked. OPS vs new system Under the OPS, employees with 20 years of service are entitled to a pension which is 50 per cent of their last drawn salary and the government bears the entire expenditure. Under the new system, the employee contributes 14 per cent of the salary while the government adds 10 per cent. However, the new system provides a provision of tax benefits as the scheme is market-linked. Officials in the state finance department admit that the expenditure will double if the OPS is reinstated. “The allocation for pensions alone will have to be Rs 1.5 lakh crore,” an official said. Economic experts too have repeatedly cautioned the Centre and state governments against introducing populist measures to garner votes. Former Reserve Bank of India (RBI) Governor Raghuram Rajan recently said direct benefit transfers can help those at the very bottom only if they are implemented in a targeted manner. “The problem is when these transfers are untargeted and there is competition between political parties on how much to give. Reverting to the OPS must be a no-go-area as it will bankrupt the government in the future,” he said.
