Congress and AAP have made restoration of Old Pension Scheme a major poll plank during poll campaigns in Himachal Pradesh and Gujarat. However, turning the clock back on reforms may fetch electoral gains to parties, but is certainly not good economics, writes Rajendra Khatry
The demand for restoration of the old pension scheme has been there for several years in the country. But of late it has gained momentum, especially in the light of the assembly elections in some states.
In fact, demand for the old pension scheme has become a major election issue in some states which want the new scheme to be rolled back and the old pension scheme restored. Opposition in BJP-ruled states like Himachal Pradesh and Gujarat, especially, are promising to restore the old pension scheme knowing fully well that such a promise will lure voters, while it will be difficult for the BJP to make any such announcement.
Earlier, Congress-ruled Rajasthan said it will bring back the old pension scheme in the state from the next financial year, and Chhattisgarh is expected to follow suit. Both the Congress and the Aam Aadmi Party (AAP) have promised the electorates in Himachal Pradesh and Gujarat that if they come to power there they will restore the old pension scheme.
Meanwhile, the ruling AAP in Punjab has already announced the restoration of the old pension scheme after a cabinet nod. AAP hopes the action in Punjab and the promise of the old pension scheme implementation in Himachal Pradesh and Gujarat if the party comes to power will help it garner a huge chunk of votes in their favour.
Similarly, the Congress hopes that the announcement in Rajasthan and promise in Himachal Pradesh will improve its election prospects in the upcoming polls.
However, the issue has put the BJP in a dilemma. The BJP which is in favour of status quo, has not made any such announcement with regard to the pension scheme. The BJP knows that any announcement in some states in favour of implementing the old pension scheme will be critical for it. With such an announcement by the BJP, there will be similar demands from other BJP ruled states in the country, which the party will find it very difficult to fulfil for the sheer economic burden it will incur on the national exchequer.
Under the old pension scheme, employees got a pension under a predetermined formula which was half of the last drawn salary. They also got the benefit of the revision of Dearness Relief (DR), twice a year. The payout was fixed and there was no deduction from the salary.
