NPS Committee : Less Assurances, More Apprehensions

NPS Committee : Less Assurances, More Apprehensions

Bruhaspati Samal

General Secretary

Confederation of Central Govt. Employees and Workers

Odisha State Coordination Committee

Mobile: 9437022669, eMail: bsamalbbsr@gmail.com

Frequent changes in the pension policies of the Govt. of India with introduction of New Pension Scheme or National Pension Scheme (NPS) with effect from 1st January, 2004 which became applicable to all new entrants to central government services (except the Army, Navy and Air Force) and adopted by all State Governments except Govt. of Tamilnadu and Wast Bengal, crores of Central and State Govt. employees and pensioners are now quite apprehensive regarding the future of pension which is treated as a major social security in the fag end of their life. It is needless to note that NPS was implemented with an Executive Order vide Ministry of Finance (Department of Economic Affairs) Notification No.5/7/2003-ECB & PR dated 22nd December, 2003 by the BJP led NDA Govt. as a part of the implementation of the new economic policy following the IMF-World Bank policy on pension reforms. Subsequently, the Congress led UPA Govt. brought the Pension Fund Regulatory Development Authority (PFRDA) Act in 2013. Since 2003 till date continuous struggle is going on both by the Central and State Govt. employees to scrap NPS and restore OPS for which there has been some changes like payment of DCRG and Family Pension etc.  Now under the banner of National Joint Council of Action comprising all Central Govt. employees including Railways and all State Govt. employees including Teachers rigorous State level and National level agitational programmes are being undertaken every month under the banner of Joint Forum for Restoration of Old Pension Scheme (JFROPS) which is getting momentum day by day. 

Encumbered with decisions taken by various State Governments like Jharkhand, Rajasthan, Chhattisgarh, Punjab and Himachal Pradesh to rollback to OPS, Andhra Pradesh Govt.’s decision to offer a guaranteed pension of 33% of the last basic pay without any monthly deduction from the employees’ salary and latest by Maharastra Govt. to exit from the NPS only because of the continuous struggle programmes conducted by each State Govt. employees including teachers in association with the Central Govt. employees and trade unions, now the Hon’ble Finance Minister on 24th March, 2023 has declared to set up a Committee to propose changes for improvising NPS. Required Official Order has been issued in the meantime constituting the Pension Committee under the Chairmanship of Finance Secretary & Secretary (Expenditure) with Secretary, DoPT, Special Secretary (Pers), Department of Expenditure and Chairman PFRDA as members vide Ministry of Finance (DoE) OM No.1(4)/E-V/2023, dated 6th April, 2023.

Considering the gravity of the continuous struggle programmes of the employees and pensioners, it was expected that the Central Govt. would take a constructive step and declare in the last Budget Session to scrap NPS since ahead there is the year of General Election. But by constituting the committee, the Govt. has tried to adopt a tactical way to smoothly overcome the year of election and to divert the employees from their struggle path which is next to impossible. The demand of the employees is not to improve, but to scrap NPS including PFRDA Act, 2013 and restore OPS. Thus, there is nothing for the employees to be surprised with the formation of the NPS Committee. In this context, it is pertinent to mention the version of Mr. Nitin Gadkari, Hon’ble Minister, Road Transport and Highways of India while addressing a Seminar on ‘Parliamentary System and People’s Expectations’, Rajastan Legislative Assembly, Jaipur, “...... If there is a will, there is a way and if there is no way, there is only survey, discussion, seminar, committees, sub-committees and researches........, kisika kam nehin karna he to committee appoint kardo, committe appoint ki, saalo saal report hi nehi aata....”  . Since the employees have been betrayed severally beforehand, they have no faith at all on such assurances and declarations of the Govt. Several such instances may be briefed as follows. 

After continuous discussion with Staff Side, the Govt. of India, in the Standing Committee meeting of National Council Joint Consultative Machinery held on 14.12.2007 assured with a written reply which states inter alia, “For the employees who have entered with effect from 01.01.2004 are not likely to be worse off vis-a-vis the current pension system in force, as the replacement rate would match to the present one. Thus, NPS is a win-win situation for the employees and the Govt”. The Staff Side started observing the situation. The actual fate of the NPS beneficiaries which remained in dark for years together came to light in contradiction to the above written assurance when they start retiring from Govt. service on attaining the age of superannuation or otherwise. Illustratively, after rendering 17.6 years of service in Defence Ordnance Factory with last basic Pay of Rs.56900/-, while Sri S. Sivasankaran is entitled for monthly pension of Rs. 28450/- plus Dearness Relief (DR) as admissible from time to time under OPS, he was eligible for Rs.4900/- only as monthly pension under NPS. Similarly one Sri R. Ramachandran when retired after serving for 13.5 years with a basic pay of Rs.30500, got  monthly pension of Rs.2417/- under NPS instead of actual entitlement of Rs.15250/- plus DR under OPS. Such, examples are many to justify that the NPS has violated the socio-economic justice needed for the employee at the fag end of his life. This has prompted the employees across the country to accelerate their movement to scrap NPS and to restore OPS.

Secondly, with regard to revision of minimum pay and fitment formula, though the Central Govt. assured the representatives of the Unions representing employees of the Central Govt. vide Ministry of Finance Press Release on 6th July, 2016 that the issues raised by them relating to pay scales and other recommendations of 7th CPC would be considered by a High Level Committee, surprisingly, in reply to Raya Sabha Question on 28, answered on 19.07.2016, the then Finance Minister, Shri Arun Jaitley replied that no such proposal was under consideration by the Govt. Since the employees have several bitter experiences how the Govt. has moved away from its written assurances, now the functionality of the proposed Committee on NPS seems to be quite apprehensive. It is just an eye-wash to overcome the election year only.  

Thirdly, while the Committee has been formed under the Chairmanship of the Finance Secretary with three others as member from the Official Side, no member has been nominated from the Staff Side to the Committee. In addition, the Terms of Reference of the Committee has no provision for consultation with the Staff Representatives and no time limit has also been fixed for the Committee to submit its report. The employees will just wait with every anxiety for the report which will never come. Thus, there is smell of doubt for adopting dilly-dally methods which may end up with anti-employee views.

Fourthly, since 2024 is the year of General Election, it is quite evident and familiar with the ruling / political parties to come up with several promises and manifestos in the pre-election year for motivating the voters. There is nothing new in it. We have all witnessed such promises earlier to return back the black money, to offer 2 crores job a year, to ensure corruption-free India, to control price rise, to streamline PDS systems etc. Not a single promise has been materialized till date. People are made foolish by false promises coloured with exquisite slogans only. Thus, the statement of Mr. Gadkari, a responsible Minister in the Union Cabinet may come true in case of this NPS committee.

In this context, the historic judgement dated 17th December, 1982 of the Hon’ble Supreme Court of India in D S Nakra versus Union of India case needs a deep analysis which states, "Pension is neither a bounty, nor a matter of grace depending upon the sweet will of the employer, nor an ex-gratia payment. It is a payment for the past services rendered. It is a social welfare measure rendering socio-economic justice to those who in the heyday of their life ceaselessly toiled for the employer on an assurance that in their old age they would not be left in the lurch". According to the historic observation of the Hon’ble Supreme Court, pension creates a vested right subject to CCS (Pension) Rules, 1972 which are statutory in character since enacted in exercise of the power conferred under proviso to Article 309 of the Constitution of India.  Thus introduction of NPS just through an Executive Order at the sweet will of the Govt. has not only violated the statutory provision guaranteed under Constitution of India, but also the historic decision of the Hon’ble Apex Court as above.

 Above all, the OPS is a defined benefit scheme without any contribution from the employee and guaranteeing minimum pension of 50% of the last pay drawn subject to minimum of Rs.9000/- per month plus DR (7th CPC norms). There is also a benefit of getting a lump sum amount equivalent to 40% of the pension at the time of superannuation as the commutation value which is restored after 15 years. In addition, the pension amount is increased by 20% each 5 years starting at the age of 80 and doubling the pension amount at the age of 100 of the pensioner. There is neither such social security nor any guarantee of minimum pension under NPS. Even though the employee contributes 10% of his salary every month in addition to 14% similar contribution by the employer, the NPS beneficiary gets a meagre amount confined to maximum 10% of the last pay drawn as monthly pension illustrated as above. To manage their families, such pensioners are now seen to work as daily-wagers, street vendors and even suicidal cases are being witnessed in case of failures.

Now, it is high time for the Central Govt. to realize the pain and problems of the employees and workers and to restore OPS. Hope, the NPS Committee will consider all aspects in the light of the Hon’ble Supreme Court’s Judgement on Pension and recommend the Central Govt. to scrap NPS and PFRDA Act 2013 considering the social security aspect of crores of employees and pensioners across the country.

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