August 25th 2024.
On a fine Sunday, the Congress party took a humorous jab at the government's recent announcement of the Unified Pension Scheme (UPS), stating that the "U" in UPS stands for the Modi government's frequent "U-turns". This sly remark was made in response to the Union Cabinet's decision to approve an assured pension of 50% of salary for employees who joined the service after January 1, 2004, under the National Pension System (NPS).
The timing of this move, just before the upcoming assembly elections in Haryana and Jammu and Kashmir, has raised eyebrows and led to speculation that it may be a political tactic. The Cabinet meeting, chaired by the Prime Minister Narendra Modi, gave the green signal to the Unified Pension Scheme, which guarantees a fixed pension amount. This decision has fulfilled a long-standing demand of government employees.
In a clever wordplay, Congress President Mallikarjun Kharge quipped, "The 'U' in UPS stands for Modi Govt's U-turns! Post June 4, the power of the people has prevailed over the arrogance of power of the Prime Minister." He went on to list some of the government's recent policy reversals, such as the rollback of Long Term Capital Gain/Indexation in the budget, sending the Waqf Bill to JPC, the Broadcast Bill, and the Lateral Entry. Kharge promised to hold the government accountable and protect the interests of all citizens.
The new pension scheme also guarantees an assured minimum pension of Rs 10,000 per month after a minimum of 10 years of service. This option scheme is expected to benefit 23 lakh central government employees and can potentially increase to 90 lakh if state governments choose to join. Union minister Ashwini Vaishnaw announced that the scheme will also provide an assured family pension to the spouse of a deceased employee, along with inflation indexation on various pension amounts.
This marks a significant transformation of the National Pension System, which previously relied on the contributions made by employees and the government. The recent announcement came at a time when several non-BJP states have decided to revert to the DA-linked Old Pension Scheme, and employee organizations in other states have also raised demands for a similar pension plan. The NPS has been in place for all government employees, except those in the armed forces, joining the central government after January 1, 2004.
Under the Old Pension Scheme, retired government employees received 50% of their last drawn salary as monthly pensions, which increased with the hike in the DA rates. However, this scheme was deemed to be financially unsustainable as it was not contributory, leading to a growing burden on the exchequer. With the introduction of the Unified Pension Scheme, the government aims to address these concerns and provide a more secure and stable pension system.
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