NEW DELHI: Finance minister Nirmala Sitharaman said on Tuesday that a resolution will be reached concerning the New Pension Scheme (NPS), addressing relevant issues while maintaining fiscal responsibility.
Last year, the finance ministry formed a committee, headed by finance secretary T V Somanathan, to evaluate the pension scheme for government employees and suggest necessary changes, taking into account the current framework and structure of the National Pension System.
Sitharaman acknowledged the significant progress made by the Committee reviewing the NPS and the constructive approach taken by the staff side of the National Council of the Joint Consultative Machinery for Central Government Employees. “A solution will be evolved which addresses the relevant issues while maintaining fiscal prudence to protect the common citizens,” the minister said.
Several non-BJP governed states have opted to revert to the DA-linked Old Pension Scheme (OPS), and employee organizations in other states have also demanded the same.
Under the OPS, retired government employees received 50 per cent of their last drawn salary as monthly pensions, with the amount increasing along with the hike in the DA rates. The finance minister also announced measures to enhance social security benefits, such as raising the deduction of expenditure by employers towards NPS from 10 to 14 per cent of the employee’s salary.
Additionally, it is proposed that employees in the private sector, public sector banks, and undertakings who opt for the new tax regime will be allowed to deduct this expenditure up to 14 per cent of their salary from their income.
The finance minister proposed the introduction of ‘NPS-Vatsalya’, a plan that enables parents and guardians to contribute for minors, which can be easily converted into a regular NPS account once the minor reaches the age of majority.
(With agency inputs)