Old Pension Scheme of Himachal Pradesh is injudicious step, will put states' finances under great difficulty: 15th Finance Commission

Congress Party's promise of the Old Pension Scheme (OPS) in Himachal Pradesh is an injudicious step. It will put states' finances under great difficulty, said NK Singh, Chairman of the 15th Finance Commission on the sidelines of the CII Global Economic Policy summit 2022.

Talking to the media, Singh said, "In my view, giving up the new pension scheme and going back to adopting the old pension scheme is an injudicious step", and added, "It was debated very carefully during the earlier government, and Dr Manmohan Singh was one of the voters".

Singh further said, "My colleague Montek Singh Ahluwalia has commented extensively on the subject that it would be a fiscal disaster for states to go back and adopt the old pension scheme. Some states, which are embarking on this, would really be putting the state's finances under great difficulty and duress".

"There is sound economic logic in the new pension scheme, it was debated, deliberated and adopted", he further said.

Notably, the Congress Party which has bagged 40 seats in the 68-seat assembly in Himachal Pradesh, has promised to restore the Old Pension Scheme (OPS) in the state, as per its election manifesto.

The OPS figured as a prominent election promise in the Assembly elections in the two states that recently went to polls, triggering debates that went beyond the political arena. Two Congress-ruled states Rajasthan and Chhattisgarh have already decided to implement the OPS.

Purportedly, it was the OPS promise of the Congress that caught the fancy of the electorate in Himachal Pradesh. In this state, government employees are the most influential section and hence, the issue was put to the electoral test.

The Congress party's star campaigner, Priyanka Gandhi Vadra, promised in election rallies that the new Congress government would implement OPS in its first cabinet meeting.

To the BJP's charge, that the promise was 'financially unfeasible', Vadra cited how OPS was being implemented in Congress-ruled Rajasthan, Chhattisgarh and Jharkhand.

Notably, the former Planning Commission Vice Chairman in the UPA era, Montek Singh Ahluwalia, last month advocated that returning to OPS was not feasible fiscally and in fact remarked that "bringing back the old pension system is one of the biggest 'Revdis' that are now being invented".

( With inputs from ANI )