New Delhi: The Reserve Bank of India (RBI) has warned some states against withdrawing the Old Pension Scheme (OPS), saying that doing so could put a strain on the state’s finances in future. The possibility that some states will revert to the previous pension system is a significant risk that hangs over the sub-fiscal horizon. According to RBI research, “State Finances: A Study of Budgets 2022-23”, the annual fiscal resource savings resulting from this action are temporary.
The central bank said in its report on state finances, which was made public on Monday, that governments risk increasing future unfunded pension liabilities by postponing current spending. The central bank said in its report on state finances, which was made public on Monday, that governments risk increasing future unfunded pension liabilities by postponing current spending. ,Also read: Samsung Republic Day Sale 2023: Get a bumper discount of up to 61% on these devices,
The observations of the RBI report were released at the same time as several states under their control announced the withdrawal of the defined benefit scheme. The most recent one is Himachal Pradesh, which is ruled by the Congress party and has announced the return of the old Pension Scheme (OPS) linked to Dearness Allowance (DA). ,ALSO READ: This Indian company is the latest to join the wave of layoffs; 70 percent staff reduction,
The governments of Rajasthan, Chhattisgarh and Jharkhand had earlier informed the federal government and the Pension Fund Regulatory and Development Authority (PFRDA) about their decision to introduce OPS for their employees.
The Aam Aadmi Party-led Punjab also issued a notification on 18 November 2022 on the implementation of OPS for state government employees who are currently covered by NPS.