November 22, 2024 22:58 (IST)
Follow us:
facebook-white sharing button
twitter-white sharing button
instagram-white sharing button
youtube-white sharing button
Centre to send over 10,000 additional soldiers to violence-hit Manipur amid fresh violence | Chhattisgarh: 10 Maoists killed during encounter with security forces in Sukma | Baba Siddique murder case: Arrested Akashdeep Gill used a labourer's hotspot to evade tracking, say police | Donald Trump picks 'smart and tough' Pam Bondi as new US Attorney General after Matt Gaetz withdraws | Canadian government denies media report that claims PM Modi knew of Khalistani leader Nijjar's killing
'A major risk looming large': RBI warns against Old Pension Scheme
Old Pension Scheme
Image Credit: wikipedia.org

'A major risk looming large': RBI warns against Old Pension Scheme

| @indiablooms | 17 Jan 2023, 11:07 pm

Mumbai: The Reserve Bank of India (RBI) has cautioned states against Old Pension Scheme, saying that it would strain state finances in the future.

"A major risk looming large on the subnational fiscal horizon is the likely reversion to the old pension scheme by some states," the central bank said.

"The annual saving in fiscal resources that this move entails is short-lived. By postponing the current expenses to the future, states risk the accumulation of unfunded pension liabilities in the coming years," it said in its report on state finances released Monday.

Himachal Pradesh is the latest state to announce the restoration of the old pension scheme after Congress won the assembly elections.

It is the third Congress-ruled state after Rajasthan and Chhattisgarh to do so.

Jharkhand, where Congress is an ally of the ruling coalition, has also returned to the old system.

Arvind Kejriwal’s Aam Aadmi Party-ruled Punjab is considering it as well.

Economists have warned that the financial liability owing to the Old Pension Scheme would take a dangerous shape as states don’t create a corpus to fund it.

The old scheme was replaced by the National Pension Scheme (NPS) for central and state government employees with defined contributions.

Congress has justified its move on grounds of social security and the welfare of the employees of the states where it is in power.

Support Our Journalism

We cannot do without you.. your contribution supports unbiased journalism

IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.

Support objective journalism for a small contribution.