NEW DELHI: India can’t afford to go back to the Old Pension System (OPS), but it is possible to address the core issues raised by government employees without being fiscally imprudent, said finance secretary TV Somanathan, who is also heading the Committee on National Pension System (NPS).
In an interaction with this newspaper, he said the committee had multiple rounds of talks with the states and staff associations, and one conclusion emerging after a lot of financial simulations and calculations with PFRDA (Pension Fund Regulatory Development Authority) is that the return to OPS is not feasible.
“I am of the opinion that the return to OPS will be financially adverse for the macroeconomic future of India,” said Somanathan. He is hopeful that a middle ground can be reached and all the core issues raised by the employees can be resolved.
As per him, the three core demands are – a pension which is not market linked; it is protected from inflation and; and a minimum assured pension for employees who have a shorter service. “These three issues, we think, can probably be addressed in a manner that is fiscally prudent and responsible and which doesn’t throw burden on future generations and which can be done in a fiscally prudent manner,” he said.
On the government’s ambitious plan for creation of jobs and skill development, the secretary said the schemes are implementable as they would be implemented through the existing mechanism of the employee provident fund organisation.
“So, if the employer is enrolling the employee there, and if they qualify, they will fall into a subsidy system, which EPFO will implement,” says Somanathan. He refuted the claims that there would be any targets for the companies to meet the number of new beneficiaries given in the budget speech. The budget expects to benefit 4.1 crore via the employee-linked scheme. He said these are just estimates and not targets.
On the internship programme, where the government plans to give internship opportunities to 1 crore youths in top 500 companies in five year, Somanathan said there would be requests from the government to the top 500 companies, but it is completely voluntary for the companies to hire interns or not.