{"id":215554,"date":"2022-11-23T19:10:18","date_gmt":"2022-11-23T13:40:18","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=215554"},"modified":"2022-11-23T19:10:18","modified_gmt":"2022-11-23T13:40:18","slug":"politics-over-pension-on-nps","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/politics-over-pension-on-nps\/","title":{"rendered":"Politics over pension \u2013 on NPS"},"content":{"rendered":"\n<p><strong>Source<\/strong>: The post is based on an article\u00a0\u201cPolitics over pension<strong>\u201d <\/strong>published in <strong>Business Standard<\/strong>\u00a0on\u00a0<strong>23<sup>rd<\/sup> November 2022<\/strong>.<\/p>\n<p><strong>Syllabus: GS 2 &#8211; Governance<\/strong><\/p>\n<h5><strong>Relevance: concerns associated with Old Pension Scheme.<\/strong><\/h5>\n<p><strong>News:<\/strong> Punjab along with other states such as Chhattisgarh, Rajasthan and Jharkhand have opted to restore the Old Pension Scheme (OPS) from the current National Pension System (NPS).<\/p>\n<h5><strong>What is the difference between OPS and NPS?<\/strong><\/h5>\n<p>NPS was adopted by every state except West Bengal for the government employees who joined from 1st April 2004.<\/p>\n<p>NPS and OPS both have <strong>tax benefits<\/strong> but the OPS is <strong>inflation-linked<\/strong> and there is a hike in pension every six months in the form of dearness allowance (DA).<\/p>\n<p>The <strong>government bears<\/strong> <strong>the entire cost<\/strong> of the OPS whereas in NPS employees contribution is 10 percent of salary and DA and 14 percent is contributed by the government.<\/p>\n<p>The funds contributed by the government and the employees are deposited in different schemes approved by the Pension Fund Regulatory and Development Authority <strong>(PFRDA).<\/strong><\/p>\n<p>The deposited fund is then invested in the <strong>equity and debt market<\/strong> depending on the employee\u2019s choice and subject to guidelines. Therefore, NPS reduces financial burden on the states.<\/p>\n<h5><strong>What are the problems with adopting OPS?<\/strong><\/h5>\n<p>OPS acts as a <strong>fiscal burden<\/strong> on the states.<\/p>\n<p><strong>For example,<\/strong> Punjab\u2019s projected expenditure on the pension for the current fiscal year is estimated at one-third the state\u2019s own tax revenues. The liabilities would exceed the state\u2019s own tax revenue by 46 per cent if the salaries and interest payments were added to it.<\/p>\n<p>Similar is the case with Gujarat which is in better financial shape than Punjab. The pension and salary costs would amount to 72 per cent of its tax revenues.<\/p>\n<p>Therefore, it is not wise to return to OPS as it acts as burden on the state government and on the taxpayers.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source: The post is based on an article\u00a0\u201cPolitics over pension\u201d published in Business Standard\u00a0on\u00a023rd November 2022. Syllabus: GS 2 &#8211; Governance Relevance: concerns associated with Old Pension Scheme. News: Punjab along with other states such as Chhattisgarh, Rajasthan and Jharkhand have opted to restore the Old Pension Scheme (OPS) from the current National Pension System&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/politics-over-pension-on-nps\/\">Continue reading <span class=\"screen-reader-text\">Politics over pension \u2013 on NPS<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10503,212],"class_list":["post-215554","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-2","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704952794},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/215554","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=215554"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/215554\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=215554"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=215554"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=215554"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}