Economy India
RAJ ARTHA

Restoration of the old pension policy will promote inequality

Restoration of the old pension policy will promote inequality

 Manohar Manoj

Now a new chessboard of competitive electoral politics has been laid in the country and that is regarding the restoration of the pre-2004 pension policy of government employees. In this sequence, the AAP-ruled Punjab state government recently announced the restoration of the old pension policy for its employees. First, the Congress-ruled Chhattisgarh government started this exercise, in which now the governments of Rajasthan and Jharkhand have also joined very soon the Tamil Nadu government is also preparing to take its call in this matter. The restoration of this old pension policy means that these state governments will provide half of the salary received by their employees at the time of retirement till their death. This amount will also include the increase in dearness allowance as is given to government employees during their tenure.

The implementation of this new policy means that these state governments will now have to spend almost the same amount from their exchequer on the salaries and allowances of their employees on retired employees without getting any information about their productivity.  Let us tell you that at present the salary budget of most of the state government employees of the country is around their pension budget.  In many states, the number of pensioners is more than the number of working employees.
If seen, this decision taken by the above-mentioned states is a bold political decision taken at the cost of a huge loss by reversing a major step in economic and administrative reforms. A decision where the majority of the country’s elderly, crippled, disabled, destitute, and socially destitute and widowed population makes rounds of offices to get an adequate pension amount.

Ninety percent of the unorganized population of the country and thirty crore people eligible for social security, whose names are registered in the pension list, do not receive a monthly pension of even a thousand rupees. Even if you get it anywhere, know the fact that they are not paid regularly every month anywhere in the country. To such a huge vulnerable farming population, pension is paid once in six months in the states. Whereas old retired employees get a pension of Rs 1 lakh before the 33rd of the month. Currently, if we go to the states, in each block the applications of ten thousand disabled and elderly people are waiting for approval in the Social Welfare Department for years. Similarly, pension applications of disabled people are rejected on the grounds of insufficient disability in medical examination, knowing that he is completely incapable of earning his livelihood. Under the AAP-ruled Delhi government, nearly three lakh pension applications of senior citizens are lying in cold storage for the last three years. But the AAP government is not accepting them citing financial burden. But this government is always ready to create a vote bank by providing free electricity, water, and bus services. It has to be said that these state governments have restored the pension of the employees as a political misadventure but the question is how will these state governments bear the heavy financial burden of this step? Roughly the same amount comes from the state’s major sources of income, which include petroleum taxation, excise, property registration, and provincial share in GST. So that they can cover all the administrative expenses of the state. A few states of the country have a surplus in this amount, which include Gujarat, Karnataka, and Tamil Nadu, otherwise most of the states of the country have to depend on the amount transferred from the center for their development expenditure. Since the maximum share of the states in the centrally sponsored scheme is only twenty to twenty-five percent, then their work somehow gets done with their surplus. Let us tell you that the Central Government in the country has strong sources of income Two-thirds of its total expenditure goes towards non-plan expenditure i.e. defense, administrative expenditure, pension, subsidy, and payment of interest and the remaining one-third goes towards development of economic infrastructure like roads, railways, electricity and communication and social infrastructure. Infrastructure i.e. expenditure on education and health is made possible.

Instead of making the pension of government employees a financial burden on the government, the Vajpayee government had introduced a new pension scheme i.e. Employees’ Provident Fund, which includes contributions from both the employee and his employer. A new system was created to decide the pension amount based on the fund created from it and the stock price.  With this step, the Center and the states got relief from a huge financial burden. Currently, 22 lakh employees of the Central Government and 50 lakh employees of the states are connected to this scheme. It is a different matter that the government should make provision for a better-guaranteed interest on the amount deposited in NPS like EPF and PPF and not keep it in the category of normal investment in the stock market.

But the biggest question is that such well-being and bad behavior of government employees in a country where three-fourths of the country’s population is either deprived of social security facilities or is a victim of its inadequacy and irregularity gives a very wrong message. A message that presents a tremendous example of two types of worlds in the country, a world of one superior and one inferior and overall inequality in the country. Anyway, the unproductivity of the government employees of the country, their anti-people attitude, their corruption and embezzlement and they are tagged as autocratic and embezzler throughout their life, where they become a burden on the government for sixty years and even after that, they have to pay taxes on the government in the form of pension. What will happen to the rest of the public if it becomes a huge financial burden?

The question is whether any government becomes more sensitive toward the interests of its employees due to pressure from its lobby, but the majority of the troubled population, whose votes decide the fate of any political regime, is insensitive towards them because the public is unable to express its reaction against the anti-people attitude of its employees. All governments feel that their employees, be it through embezzlement or corruption, help the ruling party to win the next election and fulfill its election promises. This is the reason that by raising the issue of an issue on which a national consensus was already reached eighteen years ago, these state governments have tried to shoot themselves in the foot. An effort that amounts to pandering to the majority socially vulnerable population. If all the political groups of the country had talked about bringing a comprehensive pension guarantee law for the thirty crore population of all the innocent sections of the country, then that step would have symbolized the real victory of the democracy of the country.

 

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