Different states in india drawing closer and closure the political s of india having making ridiculous promises that are very very dangerous for the economy of a country and one such policy is the revival of something called the old pension scheme and if you think about pension schemes to be just another government employee benefit i want you to have a look at this chart this is a charge represents how much of the states on tax avenue is being spent on pensions and sure you will be shocked to know that out of all the states on tax revenue generated for just pensions uttar pradesh spend 36.49% of its revenue we had spend 58.9% of 5TH revenue and himachal pradesh spent 79.93% of its own tax avenue into just being pensions and this means more money is being paid as pension plan for the actual development of the state itself this is the reason why the old pension scheme was scrapped and the national pension scheme was introduced by atal bihari vajpayee but even then the political parties of a country having making disasters promises to bring back the old pension scheme in fact in rajasthan and chhattisgarh back to old pension scheme
What is the old pension scheme and what is the economic impact of the scheme on your states economic ?
understand this using a let’s say mr basic monthly salary at the time of retirement was 50000 rupees so he would be a sure of a pension of 25000 basic page on that this monthly period keeps on increasing with dearness allowance this day is calculated as a percentage of the basic salary and it is meant to increase the income of these pensioners to make a for the inflation so a 4% dahi would mean that if i smera has a penture of 20 5000 rupees per month he would she is monthly income rise to 25000 + 4% of 25000 which is 1000 equal to 26000 rupees per month and regardless of the market conditions the government will have to pay the amount to the pensioners so even if the government is in a lot of dead even if the economy of the country is going down the government will have to disserve the amount to the pensioners and just like aunt as of 2021 there was 69 lakh pensioners in india german brings three major disadvantages that are disaster for the economy of our country the question is what are these disadvantages well the first form this came brings to the table is that when it is what paying 21000 pension to 1% it’s completely fine but if you just multiple this number by 10 lakh pensioners for 10 lakh pensioners this pension payout amount has balloon to 2500 crores per month that is bought 30000 crores per year that with this increasing number of pensioners and dearness allowance it keeps on stretching the balance sheet of the state and if you look at the numbers in 1991 the centres pension bill was just 3000 to 72 cross and the outgo for all the states put to get there was just 30131 crores but by 2021 the centres bill has jumped by 58 times 21.9 lakh crores and for the states it has shout up by 125 times 23.86 lakh crores in fact according to the print rajasthan alone spend 23000 pensions and 60000 to 93 crores on salaries and pages and discontinued 56% of its own tax and non tax revenue just 10 families constituting about 6% of the 1.64 families prempt 56% of the states revenue this is the first problem with the old pension schemes which is it takes over majority of the states revenue into just pensions which generates no return on investment the second and perhaps the biggest problem of all is that this 3.86 lakh crores of pension money is not coming from any pension fund the pensioners of created but from the tax funds of the existing taxes so people like you and me are paying the taxes to pay pensions for the retired people in this country. So with each passing your as inflation happens in the dearness allowance keeps on increasing the government will keep on allocating more fans for pensions than for the development of the state itself and the scary fact to hear is that the states had no concrete plants on how to keep on being the expansion payments and this is a reason why in this that while gujarat maharashtra 15.33% 12.98% and 11.8% of their own tax revenue in pensions bihar punjab assam himachal pradesh aspanding 58.9% 34.24% 40 104% 79.93% and 36.49% of their own tax avenue into just paying pensions and this is a very very big deal
Revenue is going to something that does not give out any return on investment the economics is terrible and secondly because the states waste the turn of the money into pensions they do not have money to run the state and then become dependent either on the centre or take up more loans to run the government and if you look you will see that punjab uttar pradesh and bihar are spending so much and pensions and other things that the revenue from the centre itself accounts for 42.7% 52.1% and 75% of their revenue shoe all the states start doing the same the central government will go back and all the states will turn into mini sri lanka’s of ower country. The state governments in rajasthan and chhattisgarh switching to the old pension scheme and now that a similar planes being made for punjab and himachal pradesh these in the problems with the old pension scheme and this is reason why leasing chairman the vajpayee government national pension scheme in 2004
Politicians can actually promised they want and the common man will be completely blind cited about the long term impact of this move so at the end of the day it is great to please people and get votes but it does not sent to be same to be good for the finance of the state and you know what is the worst part about this change when this government brings back the old pension scheme for the first few years the expense of the government will actually degrees and everything will use headline will say that government is decrease the cause of the old pension scheme but the catch whole here is that if you remember for the pension fund both the employee and the government companies have to old pension scheme is implemented the government will save this 10% contribution everyone so on paper it will look like the states finance improving in fat even know the state finance extremely stretched because the retired people in the old pension scheme the government is making a contribution for the new pension scheme workers so it will take another 10 to 20 years for all the people in the old pension scheme to pass away and then the new pensioners will receive the come from the national pension fund scheme and that to from 2030 so you see this is such a unique policy good or bad decision will not be visible now but 10 to 20 years an again to reverse it will take another 20 years this is the reason why i say it extremely important for the citizens were country to keep an eye on the states finance.