Old Pension Scheme: The Reserve Bank of India (RBI) has warned the states not to think about restoring the Old Pension Scheme. Due to this, their expenses will increase manifold and become unbearable.
In its report, RBI has expressed concern over the promises of old pension scheme instead of new pension scheme. He advised the state governments that their financial health could be adversely affected due to promises made to woo the public. OPS will prove to be very harmful for the government exchequer.
OPS implemented in some states, consideration going on in some
Recently some states have reinstated the old pension scheme. These include Rajasthan, Chhattisgarh and Punjab. Also, there is discussion going on to bring OPS in Karnataka also. RBI has advised the states to continue with the New Pension Scheme (NPS). Releasing its report ‘State Finances
A Study of Budgets of 2023-24’, RBI warned that if all the states bring back OPS, then the financial pressure on them will be almost Rs. Will increase up to 4.5 times. OPS will have a negative impact on GDP. The burden of additional expenditure on this will reach 0.9 percent of GDP by 2060.
There will be no money for development worksÂ
According to the RBI report, on the lines of states that have reinstated OPS, other states have also started considering bringing it. If this happens, the financial burden on the states will increase and expenditure on development works will decrease. RBI said that OPS is a backward step. This will erase the gains from previous reforms. There is also a fear that this will cause harm to future generations. According to the report, the last batch of OPS will retire in early 2040 and they will continue to get pension till 2060.
Increase revenue, do not make populist promises – RBI
There are general elections in the country next year. In such a situation, RBI has suggested increasing revenue instead of increasing expenditure through populist promises. It has been said in the report that all the states should think about increasing their earnings.
States should focus on reducing registration fees, stamp duty, stopping illegal mining, increasing tax collection and stopping tax evasion. Apart from this, attention should be paid to renewing taxes on property, excise and automobile which will increase their revenue.
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