NEW DELHI: The government on Friday announced that a committee under the Finance Secretary would be constituted to improve the New Pension Scheme (NPS) with a view to take care of the concerns of employees while maintaining fiscal prudence.
While moving the Finance Bill, 2023, for consideration and passage in the Lok Sabha, Finance Minister Nirmala Sitharaman said a new approach to the NPS would be designed for adoption by both Central and state governments.
“I propose to set up a committee under the Finance Secretary to look into the issue of pension and evolve an approach which addresses the needs of employees while maintaining fiscal prudence to protect common citizens,” she said.
“The approach will be designed for adoption by both Central government and state governments,” she said.
The decision comes against the backdrop of several non-BJP states deciding to revert to the DA-linked Old Pension Scheme (OPS) and also employee organisations in some other states raising demand for the same.
The state governments of Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh have informed the Centre about their decision to revert to the OPS and have requested a refund of corpus accumulated under the NPS.
Earlier this month, the Central government informed Parliament that it was not considering any proposal to restore the OPS in respect of the Central government employees recruited after January 1, 2004.
Under the OPS, retired government employees received 50 per cent of their last drawn salary as monthly pension. The amount keeps increasing with an increase in the DA rates. The OPS is not fiscally sustainable as it is not contributory in nature and the burden on exchequer keeps on mounting.