The Reserve Bank of India (RBI) in its report on ‘’State Finances: A Study of Budgets of 2023-24’’ said the return to the OPS by a few states and reports of some other states moving in the same direction would exert a huge burden on state finances and restrict their capacity to undertake growth-enhancing capital expenditures. Internal estimates suggest that if all the state governments revert to OPS from NPS, the cumulative fiscal burden could be as high as 4.9 times that of NPS, with the additional burden reaching 0.9 percent of GDP annually by 2060.
‘’This will add to the pension burden to retire by early 2040s and therefore, draw pension under the OPS till the 2060s. Thus, any reversion to OPS by the states will be a major step backward, undermining the benefit of past reforms and compromising the interest of future generations,’’ said RBI.
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