No plans to scrap NPS: Government at Lok Sabha

The Centre denied on Monday that it plans to scrap the existing National Pension Scheme (NPS) for government employees and revert to the old pension scheme, as Congress-ruled Rajasthan and Chhattisgarh have done.

On the first day of the second leg of the budget session, a Congress MP from Bastar in Chhattisgarh questioned the government about scrapping the NPS and reverting all central government officials to the Old Pension Scheme (OPS).

In response to the question, Union Minister of State for Finance Dr Bhagwat Karad stated that the Indian government was not considering any proposal.

The NDA government, led by Atal Bihari Vajpayee, abolished the old pension scheme in 2003 and replaced it with the current national pension scheme on April 1, 2004, just a month before it was defeated in elections.

The National Pension Scheme was created to relieve the central government of its pension obligations. It allows the beneficiaries, who are government employees, to choose where their money should be invested. This can be accomplished by making regular contributions to a pension account throughout their career. They can take a portion of their pension after they retire.

The old pension scheme, on the other hand, required both the government and employees to contribute an equal amount to the pension fund. The old pension scheme required a government employee to receive 50% of his or her last drawn salary as a pension.

Rajasthan and Chhattisgarh have announced that the old pension scheme will be revived in the coming fiscal year. According to reports, Rajasthan Chief Minister Ashok Gehlot informed Congressman Rahul Gandhi that the state governments of Kerala, Andhra Pradesh, and even BJP-ruled Assam had formed committees to study the OPS.

Read: Lok Sabha Q&A: on scrapping of NPS by Rajasthan