Diwali Gift: Mann Govt In Punjab Announces Restoration Of Old Pension Scheme

The cabinet has also approved to give 6 percent installment of DA to government employees. 

Punjab Chief Minister Bhagwant Mann. (Image Source: File Photo)

Ahead of Diwali, Chief Minister Bhagwant Mann on Friday announced that the Punjab government will be restoring the old pension scheme for government employees. The decision has been taken during the cabinet meeting today. The cabinet has also approved giving 6 per cent instalment of DA. 

One of the Aam Aadmi Party's main electoral pledges in Punjab this past February was to bring back the previous pension programme within the first month of becoming an office. After seven months, the Punjab government has finally announced to revive the scheme. 

Earlier, 37 employee unions have been demonstrating since October 10 calling for the expediting of the procedure. They had said that they will take their protest to Himachal Pradesh, which is going to the polls, where the AAP has promised to put it into effect within three months if won.

Employees and Punjab Education Minister Harjot Bains, who is also in charge of the party's Himachal Pradesh elections, met on Wednesday, but no agreement was reached. The strike was then extended till October 26 from its original date of October 19th.

Punjabi state government employees have made a strong case for the reinstatement of the old pension scheme after it was discontinued in 2004. The New Pension Scheme, often known as the NPS, was launched in 2003 by the administration of Atal Bihari Vajpayee.

Employees used to deposit up to 50% of their salaries into the General Provident Fund (GPF) with the government as part of the old pension plan. The monthly minimum deposit was Rs 2,000. The state government used to hold custody of this money. The Central government was home to the Pension Fund Regulatory and Developmental Authority (PFRDA). Under it, the funds were invested in equities in accordance with the Indian government's standards.

Employee Provident Fund, or EPF, deductions are made from an employee's base pay under the NPS at a rate of 10%. The sum is then invested in the Pension Fund Regulatory Development Authority (PFRDA) after the government adds 14% of its portion to it.