Amid massive protests in several states by government employees demanding restoration of the old pension scheme, Union Finance Minister Nirmala Sitharaman on Friday said the Centre would form a committee to look into issues related to pension, ANI reported.
While moving the Finance Bill 2023 in the Lok Sabha for consideration and passage, Sitharaman said representations were received that the national pension system for government employees needs to be improved.
"I propose to set up a committee under the finance secretary to look into this issue of pension and evolve an approach which addresses the need of employees while maintaining fiscal prudence to protect the common citizens. The approach will be designed for adoption by both central and state governments," the Finance Minister said.
READ | 18 Lakh Maha Govt Staff Go On Strike For Old Pension Scheme After Failed Talks
From 2004, the Central government, under then Prime Minister Atal Bihari Vajpayee, discontinued the Old Pension Scheme and introduced the National Pension Scheme. In the old regime, pension was 50 per cent of the last drawn salary of the employee and the entire amount was paid by the government.
The NPS works on a defined contribution basis, where government employees are required to contribute 10 per cent of their salary to the retirement fund. The government gives up to 14 per cent for the pension corpus.
In recent months, several states have seen protests by government employees over the present pension scheme and demanded a shift back to the OPS. Five non-BJP states -- Rajasthan, Chhattisgarh, Jharkhand, Punjab, and Himachal Pradesh -- have informed the Centre about their decision to revert to the old pension scheme.
Earlier this week, Maharashtra government workers called off their strike after the Eknath Shinde-led government announced the formation of a three-member committee to conduct a comparative study of the old and new pension schemes and submit a time-bound report.
In a report last year, the State Bank of India said that if all states switch to the old scheme, the value of aggregate pension liabilities will be in the range of Rs 31.04 lakh crore. The RBI has also said a switch back to the Old Pension Scheme would entail future fiscal distress for states.
In the Lok Sabha, Sitharaman also said the RBI would look into the issues related to credit cards payments for foreign tours not being captured under Liberalised Remittances Scheme (LRS).
"RBI is being requested to look into this with a view to bring credit card payments for foreign tours within the ambit of LRS and tax collection at source there on," PTI quoted the minister as saying.