Saturday, March 2nd, 2024

Congress will have to launch old pension scheme, Himachal government is already in loss; figure it out

Photo:India TV Congress will have to launch the old pension scheme

The Congress party has got majority in the result of Himachal Pradesh election which came on 8th December. She will soon form the government. During the election campaign, the party had talked about restoring the old pension scheme on returning to power. How harmful would it be for the already loss-making Himachal government? These figures are telling. Let us try to understand through these figures that how much debt is there on the government?

These states have the highest debt

If any state has the highest debt in India, then it is Punjab. The government here has a fiscal deficit of 53%. Whereas Rajasthan has 40%. Similar is the condition of Himachal Pradesh. Debt-GSDP was estimated to be 43% in FY22.

For the last several years, the government is focusing on reducing the expenditure.

In recent years, the Himalayan state’s efforts to restructure and rationalize its expenditure by reducing the burden of expenditure (salaries, pensions and interest) have reduced Himachal’s expenditure from 80% of total revenue expenditure in FY 2013 to FY 2022- Had made 61% in 23. However, it is still the highest compared to other states.

According to PFRDA, pension regulator appointed corpus managed fund managers, a monthly contribution of 10% of basic pay and DA under NPS was to be paid by the employee and matched by the employer (the Center and most states have since increased their contribution to 14 increased by %)

Fear of getting trapped in debt trap

Reverting to OPS may provide some temporary relief to the state government as it will stop monthly contribution to NPS, but the rising components of salary/wages, unfunded pension and interest payments could lead to a debt trap for the state in the years to come Huh. NK Singh, chairman of the 15th Finance Commission, had said last week that going back to the new pension scheme and going back to the old pension scheme would be a financial crisis for states.

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