Curated By: Business Desk
Last Updated: December 12, 2023, 13:37 IST
OPS was discontinued in 2004.
As per the outdated pension scheme (OPS), a retired authorities worker will get entry to a life-lengthy steady revenue after retirement.
The Reserve Bank of India has carried out numerous provisions to help people of their put up-retirement part, introducing schemes to make sure monetary stability for retirees. One distinguished initiative was the Old Pension Scheme (OPS), offering retired authorities workers with a lifelong steady revenue, equal to 50% of their final withdrawn wage together with dearness allowances. Although the OPS was discontinued in 2004, current efforts by a number of states, together with Rajasthan, Chhattisgarh, and Punjab, purpose to reintroduce it, with Karnataka considering an identical transfer.
However, a brand new report from the Reserve Bank of India (RBI) cautions towards the widespread reinstatement of OPS. The report, analysing budgets for 2023–24, emphasises that the monetary burden on states would surge considerably if all states go for OPS, reaching 4.5 instances that of the New Pension Scheme (NPS). According to the report, the extra expenditure from OPS might quantity to 0.9% of GDP by 2060, posing a considerable problem to states’ monetary stability.
While some states have already reintroduced OPS, the RBI report urges warning, stating that such a transfer might hinder developmental initiatives and divert assets from important tasks. The report identifies OPS as a retrograde step that would undermine the advantages of earlier reforms, adversely affecting future generations. The RBI predicts that the final batch of OPS beneficiaries will retire round 2040, receiving pensions till 2060.
With basic elections approaching, the RBI advises towards implementing OPS to safe public help. Instead, the report encourages states to discover income-enhancing measures on the native stage. Strengthening tax administration to spice up assortment and forestall evasion emerges as a viable technique to reinforce the monetary capability of states.
The RBI’s report emphasises the potential pitfalls of reinstating OPS, urging states to prioritize fiscal duty and discover different income-era avenues to make sure sustained improvement with out compromising monetary stability.
