Home / News / India /  India will go bankrupt by 2030 if old pension scheme implemented: Haryana CM

Haryana Chief Minister Manohar Lal Khattar has spoken about the drawbacks of the Old Pension Scheme (OPS) citing a 'WhatsApp' message. The Chief Minister said, "Yesterday I got a message on Whatsapp where a Central govt official said that if the Old Pension Scheme (OPS) is implemented then the country will go bankrupt by 2030".

Further, Khattar said that in 2006, former Prime Minister Manmohan Singh also opposed the Old Pension Scheme. "Manmohan Singh is a great economist and he said in 2006 that the Old Pension Scheme will make India backward as the vision of the scheme is myopic," Khattar said.

Recently, the Reserve Bank of India also sounded a note of caution on reversion to the old pension scheme by some states, saying it poses a major risk on the "subnational fiscal horizon" and would result in the accumulation of unfunded liabilities in the coming years for them.

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

The government of Punjab November 18, 2022, too had issued a notification regarding the implementation of the OPS for the state government employees who are presently being covered under the NPS.

In 2004, the Union government came out with the National Pension System (NPS), a defined contribution pension scheme replacing the old pension scheme.

Under the old pension scheme, employees get a defined pension. Under this, an employee is entitled to a 50% amount of the last drawn salary as pension.

However, the pension amount is contributory under the National Pension System, which is in effect since 2004.

Several economists too have expressed concern over reverting to the OPS saying it would put stress on states' finances.

Former Deputy Chairman of the erstwhile Planning Commission Montek Singh Ahluwalia recently spoke against bringing back the OPS, saying it is one of the biggest 'revadis'.

For 2022-23, the RBI report said states have budgeted an increase in revenue spending, mainly led by non-developmental expenditures such as pension and administrative services.

Budget allocations towards medical and public health and natural calamities have been lowered, while housing outlay has been increased, the RBI report mentioned.

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