{"id":268271,"date":"2023-11-07T19:29:59","date_gmt":"2023-11-07T13:59:59","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=268271"},"modified":"2023-11-08T20:46:17","modified_gmt":"2023-11-08T15:16:17","slug":"on-the-issues-with-old-pension-scheme-pension-bloat","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/on-the-issues-with-old-pension-scheme-pension-bloat\/","title":{"rendered":"On the issues with Old Pension Scheme \u2013 Pension bloat"},"content":{"rendered":"\n<p><strong>Source: <\/strong>This post on the issues with Old Pension Scheme has been created based on the article<strong> \u201cPension bloat\u201d<\/strong> published in<strong> Live Mint<\/strong> on<strong> 7<sup>th<\/sup> November 2023.<\/strong><\/p>\n<p><strong>UPSC Syllabus Topic: GS Paper 3 Indian Economy \u2013 Government Budgeting.<\/strong><\/p>\n<p><strong>News<\/strong>:\u00a0This article discusses the problems of returning to the Old Pension Scheme.<\/p>\n<p>A detailed article on the<strong> Old Pension Scheme (OPS) vs National Pension System (NPS) <\/strong>can be <a href=\"https:\/\/forumias.com\/blog\/comparison-of-nps-with-old-pension-system\/\">read here.<\/a><\/p>\n<p>In recent times the issue of\u00a0Old Pension Scheme (OPS) vs National Pension System (NPS) has been a hotly debated topic. The demand for returning back to OPS is gaining traction. States such as\u00a0Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh\u00a0have already announced a shift back to the OPS.<\/p>\n<h2><strong>What are the issues with the Old Pension System?<\/strong><\/h2>\n<ol>\n<li><strong> Inequitable distribution of benefits: <\/strong>Only <strong>3.2% of the workforce<\/strong> has a claim over <strong>18% of government revenue<\/strong>.<\/li>\n<li><strong>Against fiscal prudence: <\/strong>Fiscal prudence implies using limited resources for investments like health, education, law-and-order, roads, bridges, hospitals, etc. OPS imposes an unsustainable burden on the public exchequer.<\/li>\n<li><strong>Unfunded Liability: <\/strong>It means that no contribution is made by employees during their work lives but must be paid out of current government revenue.<\/li>\n<li><strong> Constant Increment: <\/strong>The OPS is both wage-indexed (i.e. linked to compensation of the existing workforce and hence hiked with each Pay Commission recommendation) and also indexed to inflation.<\/li>\n<li><strong>Issue of inter-generational equity:<\/strong> Future generations will be burdened with higher taxes to service the debt incurred for pension payouts.<\/li>\n<li><strong>Rising life expectancy of the population:<\/strong> It will lead to a steady increase in pension emoluments.<\/li>\n<\/ol>\n<p><strong>Question for practice:<\/strong><\/p>\n<p>Returning to the Old Penson Scheme can have serious negative impacts on the Indian economy. Discuss.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source: This post on the issues with Old Pension Scheme has been created based on the article \u201cPension bloat\u201d published in Live Mint on 7th November 2023. UPSC Syllabus Topic: GS Paper 3 Indian Economy \u2013 Government Budgeting. News:\u00a0This article discusses the problems of returning to the Old Pension Scheme. A detailed article on the&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/on-the-issues-with-old-pension-scheme-pension-bloat\/\">Continue reading <span class=\"screen-reader-text\">On the issues with Old Pension Scheme \u2013 Pension bloat<\/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":[216,8184,10501],"class_list":["post-268271","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-economy","tag-live-mint","entry"],"jetpack_featured_media_url":"","views":{"total":2,"cached_at":"","cached_date":1699388628},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/268271","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=268271"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/268271\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=268271"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=268271"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=268271"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}