The central government has decided to set up a committee to recommend changes to make the politically-sensitive National Pension System (NPS), Union finance minister Nirmala Sitharaman said on Friday, amid widespread opposition to the new pension savings system that is seen to have cost the Bharatiya Janata Party (BJP) popularity. The decision came as several opposition-ruled states started reverting to the Old Pension Scheme (OPS) and making it a poll issue after several employee organisations sought the system to be rolled back for better financial security after retirement.
“Representations have been received that the National Pension System for government employees needs to be improved. I propose to set up a committee under the finance secretary to look into this issue… and evolve an approach which addresses the needs of employees while maintaining fiscal prudence to protect the common citizens. The approach will be designed for adoption by both central and state governments,” Sitharaman told the Lok Sabha while moving the Finance Bill 2023 for consideration and passage.
States that have asked the Centre to revert to OPS include Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh and are demanding a refund of the corpus accumulated under the NPS.
The OPS was a financially extravagant but politically popular scheme. The move comes with just a year left for the Lok Sabha election.