Experts caution state against reviving OPS
Mumbai: After chief minister Eknath Shinde said that the state government is positive about implementing the old pension scheme (OPS), experts and officers from the finance department have raised apprehensions that the step could cripple the state finances
Mumbai: After chief minister Eknath Shinde said that the state government is positive about implementing the old pension scheme (OPS), experts and officers from the finance department have raised apprehensions that the step could cripple the state finances.
The cash-strapped exchequer which is reeling under more than ₹6.5 lakh crore debt, will be burdened with an additional annual expenditure of ₹1.10 lakh crore if the OPS was relaunched.
In a campaign rally for the Konkan teachers’ constituency on Saturday, Shinde said, “The school education and finance departments are studying the proposal. The state is positive about the OPS for teachers and government employees.”
The statement was in contradiction with the remarks made by deputy chief minister Devendra Fadnavis, who had said that the implementation of the scheme will lead to bankruptcy. “I have spoken to the chief minister to apprise him about the financial burden on the exchequer. Not only us, but for the government led by any party in any state, the implementation of the OPS is not possible,” Fadnavis had said in the winter session of state legislature last month.
According to the finance department officials, the state cannot implement the OPS as the finances are not in a position to take the burden. The officials said that the announcement by the CM may be out of political compulsion as the teacher unions have been pressing for the OPS as a poll plank in the ongoing elections.
“OPS for teachers has become the prime issue in the elections. Vanchit Bahujan Aghadi (VBA) chief Prakash Ambedkar and Nationalist Congress Party (NCP) leaders have been pressing for the OPS. However, if it is implemented, the state finances would be in bad health. The states that have announced to introduce the OPS have requested the centre for its implantation. They have referred it to the Pension Fund Regulatory and Development Authority (PFRDA),” the official added.
A retired finance department official said that the new pension scheme is more beneficial to the employees. “Under the new pension scheme, in which the contribution is 24% of the salary, beneficiaries draw more pension than the OPS. The 7th pay commission implemented in the state five years ago has not only increased the salary multifold but also has the provision for the pension contribution,” he said.
On the other hand, GD Kulthe, chief advisor, Maharashtra State Gazetted Officers’ Federation, said, “The state government should not consider it as a burden, but a remuneration to the employees given after serving for 35 years. Though the state government has been claiming that the implementation will burden the exchequer with ₹1.10 lakh crore. The pension, however, will not have any immediate burden to the state government. A few states have already started the implementation, it is the time for Maharashtra to follow suit.”
The state had discontinued the OPS in November 2005 after the Central government discontinued it in January 2004. The OPS would entitle the employees with 50% of the last net salary drawn. The new pension scheme came into existence in 2005 has provision for 24% deduction from salary.
