Himachal CM Reverses Old Pension Scheme, Experts Question The Move

Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu said the party has fulfilled one of its key election promises by clearing the decision for government employees to reverse to the Old Pension Scheme (OPS).

The OPS will affect around 1.36 lakh people. In the party's first cabinet meeting before the state's election in November, this was seen as the key reason against the BJP. 

CM Sukhu on Friday said that it is a Lohri gift for the employees who have worked for the development of Himachal Pradesh. 

Now, all the employees under the New Pension Scheme would be covered under OPS, Sukhu told PTI. 

The OPS will be implemented at the cost of Rs 800 crore to Rs 900 crore for this year. It is likely that there would be a Rs 3 hike in Value Added Tax (VAT) on diesel. 

The cabinet has been formed to create one lakh jobs and to pay a monthly allowance of Rs 1,500 to women. A panel has been asked to create a roadmap within 30 days to execute the plans. 

Himachal Pradesh has become the third Congress-ruled state to implement OPS after Rajashthan and Chhattisgarh. 

Under the New Pension Scheme (NPS), government employees had to contribute 10 and 14 per cent of their salary to receive retirement benefits, whereas, under OPS which was stopped by the central government in 2004, the employees with 20 years of service used to get 50 per cent of their last drawn salary. 

Several experts have questioned the reversing of the Old Pension Scheme stating that it would lead to open-ended liabilities for future governments.