National Politics

Old Pension Scheme of Himachal Pradesh is injudicious step, will put statesโ€™ finances under great difficulty: 15th Finance Commission

New Delhi: Congress Partyโ€™s promise of the Old Pension Scheme (OPS) in Himachal Pradesh is an injudicious step. It will put statesโ€™ finances under great difficulty, said NK Singh, Chairman of the 15th Finance Commission on the sidelines of the CII Global Economic Policy summit 2022.
Talking to the media, Singh said, โ€œIn my view, giving up the new pension scheme and going back to adopting the old pension scheme is an injudicious stepโ€, and added, โ€œIt was debated very carefully during the earlier government, and Dr Manmohan Singh was one of the votersโ€. Singh further said, โ€œMy colleague Montek Singh Ahluwalia has commented extensively on the subject that it would be a fiscal disaster for states to go back and adopt the old pension scheme. Some states, which are embarking on this, would really be putting the stateโ€™s finances under great difficulty and duressโ€.
โ€œThere is sound economic logic in the new pension scheme, it was debated, deliberated and adoptedโ€, he further said.
Notably, the Congress Party which has bagged 40 seats in the 68-seat assembly in Himachal Pradesh, has promised to restore the Old Pension Scheme (OPS) in the state, as per its election manifesto.
The OPS figured as a prominent election promise in the Assembly elections in the two states that recently went to polls, triggering debates that went beyond the political arena. Two Congress-ruled states Rajasthan and Chhattisgarh have already decided to implement the OPS.
Purportedly, it was the OPS promise of the Congress that caught the fancy of the electorate in Himachal Pradesh. In this state, government employees are the most influential section and hence, the issue was put to the electoral test.

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The Congress partyโ€™s star campaigner, Priyanka Gandhi Vadra, promised in election rallies that the new Congress government would implement OPS in its first cabinet meeting.
To the BJPโ€™s charge, that the promise was โ€˜financially unfeasibleโ€™, Vadra cited how OPS was being implemented in Congress-ruled Rajasthan, Chhattisgarh and Jharkhand.
Notably, the former Planning Commission Vice Chairman in the UPA era, Montek Singh Ahluwalia, last month advocated that returning to OPS was not feasible fiscally and in fact remarked that โ€œbringing back the old pension system is one of the biggest โ€˜Revdisโ€™ that are now being inventedโ€.

(Except for the headline, this story has not been edited by HW News staff and is published from a syndicated feed.)

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