The Reserve Bank of India on January 16 warned about a major risk on the sub-national fiscal horizon, that of reversal of the old pension scheme by some states.
The latest warning comes amid political lethargy as some states take decisions to revert to old pension schemes.
“The annual savings in fiscal resources that the move entails are short-lived. By postponing current spending for the future, the state could avoid accumulation of unfunded pension liabilities in coming years,” it said in its report on state finances released on Monday. take the risk of.”
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according to a report by Economic TimesAmong the states, Himachal Pradesh is the latest one which has announced to restore the old pension scheme.
This is the third Congress-led state which has taken this decision. Earlier, Rajasthan and Chhattisgarh governments have also adopted the same path. Congress-ally Jharkhand has reverted to the old pension scheme, while the Aam Aadmi Party-led Punjab government is also considering a return to the old pension scheme.
As per the details, the states are adopting the old pension route as they believe that it will bring social security and welfare to their employees. However, economists see this as a trend that could spell disaster in the future as states are not going to create any funds by doing so.
Earlier, the National Pension Scheme replaced the old pension scheme for central and state government employees.
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