India’s Finance Minister Nirmala Sitharaman recently addressed the allegations made by the Congress Party regarding the government’s policy actions. In her statement, she firmly asserted that the government has not made any “U-turn” in its policies. According to her, various options have been provided to the people concerning the Old Pension Scheme (OPS), indexation, and the new income tax regime. Sitharaman emphasized that the government’s intent is to establish policies that are beneficial to the public, stating that they have not reversed their decisions but merely revised them to accommodate the convenience of the citizens.
What Did the Congress Party Say?
After the approval of the Unified Pension Scheme (UPS), Prime Minister Narendra Modi took to social media platform X to express pride in the hard work of government employees contributing to the nation’s progress. He highlighted that the decision on UPS reflects the government’s commitment to ensuring the welfare and secure future of the employees. However, Congress President Mallikarjun Kharge took a dig at PM Modi’s statements, implying that the ‘U’ in UPS signifies the ‘U-turn’ by the Modi government. He further assessed that public power has overwhelmed the arrogance of the Prime Minister since June 4.
Understanding the Unified Pension Scheme (UPS)
The approval of the Unified Pension Scheme has sparked considerable debate among opposition leaders, who are now criticizing the central government. The scheme is scheduled to be implemented in April next year. Under this scheme, government employees will receive a fixed pension, contributing 10% of their salary towards it, while the government will contribute a significant 18.5%, an increase from the previous 14%. In addition to the fixed pension, employees with 25 years of service will also receive a lump sum payment. The pension amount will be adjusted according to inflation, and employees can expect to receive at least 50% of their last drawn salary as a pension after 25 years of service, alongside a guaranteed pension of INR 10,000 after 10 years of service. Such provisions were not present under the National Pension System (NPS) before.
Comparative Overview of Pension Schemes
| Feature | Unified Pension Scheme (UPS) | National Pension System (NPS) |
|---|---|---|
| Employee Contribution | 10% of salary | Varies |
| Government Contribution | 18.5% of salary | 14% |
| Pension After 25 Years | Fixed plus one-time payment | Based on accumulated corpus |
| Pension Adjustment | Indexed to inflation | No set provision |
| Pension After 10 Years | Guaranteed INR 10,000 | No such provision |
Conclusion
As the government prepares to roll out the Unified Pension Scheme, the dialogue between the ruling party and the opposition continues to heat up. The implementation of this scheme promises significant changes in the retirement benefits of government employees, addressing previous shortcomings of the National Pension System. With the Congress Party alleging policy reversals, the coming months will likely witness a robust political discourse as stakeholders analyze the true impact of this new initiative on public welfare.
