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.
