Unified Pension Scheme: Why is the opposition objecting to it?

The Unified Pension Scheme (UPS) for government employees approved by Prime Minister Narendra Modi-led Union government last week has now turned into a political slugfest between the ruling coalition and the opposition.

The new scheme assures government employees of a pension amounting to 50% of their basic salary for those who joined service after 1 January 2004.

The Union government, led by Prime Minister Narendra Modi, claims that the UPS fulfils a long-standing demand of government employees. Employees opting for the UPS would be eligible for an assured pension after 25 years of service.

This decision, approved by the Union Cabinet on 23 August, triggered a political row, with the Congress Party and the ruling Bharatiya Janata Party (BJP) exchanging barbs. Here’s why the Opposition is opposing the new scheme:

Political concerns

Congress President Mallikarjun Kharge criticised the Modi government, referring to the 'U' in the Unified Pension Scheme as a symbol of the government's 'U-turns'. Kharge cited a news headline, "Assured pensions return as government backtracks on NPS", to underline his point.

Kharge linked this so-called U-turn to the recent Lok Sabha election results, where the BJP fell to 240 seats, short of the 272 needed for a simple majority, forcing them to rely on their National Democratic Alliance (NDA) partners to form the government. He pointed to other rollbacks by the government, including the Waqf Bill and the Lateral Entry scheme, as further examples.

With assembly elections looming in several states, including Maharashtra, Haryana, Jammu and Kashmir, and Delhi, Kharge sees the timing of the UPS announcement as politically motivated.

According to the Modi government, the UPS is expected to benefit 23 lakh government employees across India immediately, with the potential to extend to 90 lakh if state governments adopt it. The scheme could also serve as a counter to the Congress Party's Old Pension Scheme (OPS), which played a significant role in the party's victory in Himachal Pradesh but failed to secure a win in Rajasthan, where it was also promised.

At least five opposition-ruled states have moved their employees from the New Pension Scheme (NPS) to the OPS, which guarantees a pension of 50% of the last base salary, according to The Hindu.

OPS vs UPS

The OPS and UPS differ in their methods of calculating pension amounts. Under the OPS, the pension is fixed at 50% of the last drawn salary plus dearness allowance (DA). The UPS calculates the pension as the average of the basic salary and DA received during the last year of service.

The minimum pension under the UPS is ₹10,000 per month, while the minimum amount under the OPS is ₹9,000 after 10 years of service. According to reports, the UPS provides an assured pension of 50% of the last drawn pay for life, making it nearly identical to the OPS.

Exclusion of paramilitary forces

The Aam Aadmi Party (AAP), part of the Congress-led INDIA alliance, has called the UPS a "massive fraud" on employees. They argue that paramilitary forces are excluded from the scheme, as their service period typically does not meet the 25-year requirement to qualify for full pension benefits.

In a post on X (formerly Twitter), AAP claimed, "The Unified Pension Scheme is worse than the New Pension Scheme. This is a big fraud on employees. Paramilitary forces have been excluded from this pension scheme as their service is less than 25 years."

Discrimination against Dalits and tribals?

Congress media chief Pawan Khera claimed that the UPS disproportionately affects Dalits, tribals, and other backward classes. In several states, the upper age limit for government jobs for reserved categories is 40 years, making it difficult for these employees to meet the 25-year service requirement for a full pension.

Khera questioned whether the government intends to remove the upper age limit for disadvantaged groups or deprive them of full pension benefits.

BJP's defence

The BJP defended the scheme, with former Union Minister Ravi Shankar Prasad praising Prime Minister Modi for introducing the UPS. He challenged the Congress to explain why it has failed to implement the old pension scheme in Himachal Pradesh, Karnataka, and Telangana after coming to power in these states.

"Will Congress merely make announcements, or will they implement them as well? Rahul Gandhi, please tell the nation whether you have delivered on your promise of the old pension scheme in Himachal Pradesh," Prasad asked.

                                                (By arrangement with livemint.com)