State drags its feet on OPS; Fadnavis to meet unions over indefinite strike

It is significant to mention that state government employees have announced an indefinite strike from March 14 demanding OPS be reintroduced. Deputy CM Fadnavis is likely to hold a meeting with the employees’ unions again on Monday

Mumbai: The Eknath Shinde-Devendra Fadnavis duo seems to have taken a U-turn on implementing the old pension scheme (OPS), fearing that the expenditure would double from the current 14.99% by 2030 and this would in turn take a toll on the spending for development work and welfare schemes.

Thane, India - February 07, 2023: Maharashtra government employees (of public works, water resources, rural development and water supply departments) protest against State Government demanding fulfilment of all their demands including the implementation of the old pension scheme, outside Thane Collector's Office, in Thane, India, on Tuesday, February 07, 2023. (Praful Gangurde/HT Photo) (HT PHOTO)

It is significant to mention that state government employees have announced an indefinite strike from March 14 demanding OPS be reintroduced. Deputy CM Fadnavis is likely to hold a meeting with the employees’ unions again on Monday.

In the run-up to the legislative council elections, Fadnavis had indicated that the government was contemplating bringing back OPS which was discontinued in 2005. However, on Friday, he told the council that its implementation would severely affect the state’s financial health.

“We spend 58% of the revenue on salaries, pension and repayment of the debt. If OPS is implemented, the burden will be felt after 2030-32. The spending may go up to 83% of the total revenue, including that from the central funds,” he said.

Figures released in the state budget do not present a rosy picture either. As per the estimates, the government is expected to spend ₹67,384 crore on pension to about 0.6 million retired employees in the next financial year. It is about 14.99% of ₹4,49,523 crore, the revenue expected during the period. Now, there is apprehension at Mantralaya that the expenditure percentage will cross 30% by 2030 if the old regime is restored.

“In the existing pension scheme, the state’s contribution recently increased to 14% from 10%, leading to an additional burden. If the OPS is relaunched, it will be applicable to the employees recruited after 2005 who will start retiring in 2030. Its impact will be unbearable on the exchequer,” an official from the finance department said, requesting anonymity.

The officer further said that the large number of recruitments in the late 1980s also contributed to the hike in expenditure on pension.

However, Vishwas Katkar, general secretary, Rajya Sarkari Karmachari Madhyavarti Sanghtana, said the state is misguiding the employees. “The impact of the financial burden on the sate coffer would be bearable.”

The issue of OPS surfaced after it became an election plank and states like Himachal Pradesh and Chhatisgarh announced to relaunch it. In Maharashtra, there have been protests over this issue for some time.