Committee to look into pension system for government employees set up by Finance Ministry

Pensions are a crucial part of overall employee welfare, meant to ensure a secure future with dignity for professionals post retirement. Although a new pension policy is in place for employees, a section has been demanding a return to the old scheme where they get 50 per cent of the last drawn salary.

• Taking note of these demands the Finance Ministry has set up a committee to review the pension system for government employees.

• The decision comes at a time when several states have decided to revert to the old pension scheme, which has raised concerns among experts.

What seasoned economists feel

• Former Reserve Bank of India Governor Raghuram Rajan has called the pensions under the old system, a massive obligation in the longer run.

• He cited the future outlay caused by indexation of the government pension with current salaries to show how the old scheme is a costly one.

• This is why a major concern about a revival of the old pension scheme, is that the benefits for the civil servants might come at the cost of the poor.

States free to make the move

• Referring to the move by states, the Comptroller and Auditor General of India has said that its a policy decision that he doesn't intend to debate.

• So far Rajasthan, Punjab, Chattisgarh, Jharkhand and Himachal Pradesh have revived the old pension scheme for government employees.