What’s bad in Restoration of OPS?
Bruhaspati Samal
General Secretary
Confederation of Central Govt. Employees and Workers
Odisha State Coordination Committee
Mobile: 9437022669, eMail: bsamalbbsr@gmail.com
The much awaited first meeting of the NPS (National Pension System) Committee constituted under the Chairmanship of Finance Secretary on 6th April, 2023 to propose changes for improvising NPS was held with the Standing Committee Members of National Council Joint Consultative Machinery (NC JCM) on 9th June, 2023. Since no Central Govt. Employees Organization and the Staff Side of NCJCM have ever demanded for any improvement in the NPS except demanding for restoration of Old Pension Scheme (OPS), the Terms of Reference were not acceptable and thus, the Staff Side submitted a memorandum to the Chairman of NPS Committee to scrap the No Guarantee NPS with request for restoration of OPS under CCS (Pension) Rules, 1972 reiterating the historic judgement of the Hon’ble Supreme Court of India delivered on 17th December, 1982 upholding the pension as a fundamental right of the employees by a five-member bench inclusive of the then Chief Justice of India V D Chandrachud against Writ Petition Nos. 5939 – 41under Article 32 of the Constitution of India known as D S Nakra and Others Vs. Union of India which stressed upon the following three important aspects in Para – 31 of the Judgement.
i. That Pension is neither a bounty, nor a matter of grace depending upon the sweet will of the employer and that it creates a vested right subject to 1972 Rules which are statutory in character, because they enacted in exercise of the powers conferred by the proviso to Art. 309 and Clause 50 of Art. 148 of the Constitution.
ii. That Pension is not an ex-gratia payment, but it is a payment for the past services rendered and
iii. 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".
The NPS Committee in the above meeting on 9th June, 2023 has assured to study the points and justification given by the Staff Side and noted to take into account while finalizing its recommendations subject to the Terms of Reference given to the Committee.
Since introduction of NPS abolishing OPS with effect from 1st January, 2004, while serious protests against scrapping up of the NPS demanding restoration of OPS are continuing by both the Central and State Govt. employees across the nation on one hand, arguments and counter arguments are going on both in favour and against of NPS and OPS by the politicians, economists and intellectuals on the other. 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 Maharashtra Govt. to exit from the NPS only because of the continuous struggle programmes of the employees, the Hon’ble Finance Minister, Govt. of India has set up a Committee on 6th April, 2023 under the Chairmanship of Finance Secretary to propose changes for improvising NPS.
Further, with the constitution of the NPS committee, the debate on the topic is touching the headlines always. Arguing in favour of NPS, while the decision of some State Governments as above for rolling back to OPS is treated as bad politics from election point of view, some consider it as bad economics since such restoration will put an unnecessary burden on the Govt. exchequer. Contradictorily, while some argue OPS as the fundamental right of the employees who have sacrificed their life for about 35 to 40 years in serving the nation, some even debate for a Guaranteed Pension System (GPS) instead of NPS.
To analyze the pension issue of State Govt. employees, it is worth reminding the statements of Rajasthan and Himachal Pradesh Chief Ministers who are of the opinion that Pension is a State subject and they have the power to decide what type of pension the respective Govt. employees should get. It is good politics for them. Govt. of India has no right to any kind of interference. But while talking about the pension issues of the Central Govt. employees, it may be recalled that NPS was implemented with an Executive Order on 22nd December, 2003 by the BJP led NDA Govt. Subsequently, the Congress led UPA Govt. brought the Pension Fund Regulatory Development Authority (PFRDA) Act in 2013. The irony is that while both the NDA and UPA Govt. at the Centre are responsible for bringing and implementing NPS, the ruling parties of these alliances in the States are moving ahead to restore OPS. But, unless the PFRDA Act, 2013 is repealed by the Centre, it will not be technically feasible to restore OPS both for the Central and State Govt. employees since the employees’ contribution from 2004 till date is required to be refunded to the respective State Governments opting for OPS. Unfortunately, there is no provision of such return in PFRDA Act, 2013. Thus, playing with the sentiments of the employees clearly knowing the technical loopholes of the pension policy is bad politics rather than restoration of OPS.
The historic judgement dated 17th December, 1982 of the Hon’ble Supreme Court of India in D.S. Nakra versus Union of India stated as above is not being analysed by any economists and intellectuals who favour NPS. Thus, introduction of NPS just through an Executive Order at the sweet will of the Govt. ignoring the above judgement of the Hon’ble Apex Court and violating the statutory provision of CCS (Pension) Rules, 1972 guaranteed under Constitution of India is just bad politics.
Contradictorily, the provision of multiple pensions under OPS to the people’s representatives even after introduction of NPS is certainly bad economics and bad politics as well. In a democratic welfare country like India, there shouldn’t be two separate principles, i.e. one for the people and another for the people’s representative. If the NPS Committee skips this aspect, it may be called as bad politics since no member has been nominated from the Staff Side to the Committee to defend the employees’ interest. While argument is going on that restoration of OPS will just satisfy a small section of organized labour, say up to 3% only at the cost of the poor unprivileged citizens of India, the so called economists and intellectuals forget to calculate the total amount of bad loans written off including heavy tax relief in favour of the big corporate houses by the Govt. every year which can be able to support the OPS burden removing the unnecessary pressure on the members of public. This is certainly another form of bad economics with the help of bad politics.
Now, the NPS Committee has to take a decision in suggesting the Govt. only to improve the NPS since the Terms of Reference do not allow to propose anything for restoration of OPS. However, some are of the opinion that it may be better for the Committee to suggest Guaranteed Pension System (GPS) with continuance of the present 10% monthly contributions from the employee’s salary as done under NPS. Stoppage of 14% contribution by the employer will balance the State’s deficiency and add to the minimum 50% of the last basic pay as guaranteed pension as was under OPS. If the return under GPS will be more than 50%, the extra amount earned beyond 50% will be kept by the Govt. and if the same is less than 50%, the Govt. has to pay the deficiency to give guaranteed pension of 50% of last basic pay. Thus, GPS may not be a bad economics.
But the fact is that the employees are neither in favour of any improvement in NPS nor interested for GPS. Rather, they are struggling to scrap out the NPS and restore OPS which is neither bad economics nor bad politics in the light of the Hon’ble Supreme Court’s judgement. The NPS Committee needs to consider the demands raised by the Staff Side in the light of Hon’ble Supreme Court’s Judgement as above.
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