These days the old pension scheme remains a hot topic in politics as well as among economists. Some states have implemented it again, but now RBI has given a stern warning to the states regarding this.
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The Old Pension Scheme (OPS) was a major issue during the recent assembly elections in Himachal Pradesh. Even before this, many other states have implemented the old pension system. It is already discussed in political circles. At the same time, it has also left wrinkles on the forehead of the economists. Now the Reserve Bank of India (RBI) has also warned the states regarding this.
If not taken back there will be huge loss
The Reserve Bank says that the old pension scheme can prove to be very harmful for the future of the states. This will not only put pressure on the financial condition of the states, but will also increase the fiscal deficit.
The central bank said that some states have implemented the old pension scheme back. This poses a major risk to their fiscal position.
Will end the savings of governments
The Reserve Bank has recently issued a report regarding the financial condition of the states. It has been said in this report that the annual saving of fiscal resources of the states will last for a short time after this step. States will go risk-averse by deferring current spending to the future; On the other hand, the responsibility of unfunded pension will be heavy on the states in the coming years.
Government of opposition parties implemented OPS
Congress ruled Rajasthan and Chhattisgarh had already implemented the old pension scheme. Recently, Himachal Pradesh is the newest state to implement this system. Whereas in Jharkhand, Congress is with the coalition government, the government there has also implemented it back. Whereas in Punjab ruled by the Aam Aadmi Party, the idea is going on for its return.
The states which have implemented the Old Pension Scheme say that behind it is the principle of public welfare of the state along with giving social security to the employees. However, many economists have expressed concern about this step of the state governments.
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