Left Front states fail to notify NPS

Four states, out of which three are ruled by Left Front governments, have not yet notified the New Pension Scheme (NPS), a uniform model aimed at catering to the pension needs of government employees as well as unorganised sector workers. Kerala, Tripura, West Bengal and Sikkim have so far not notified NPS for their employees.

The other 26 states and Union Territories have notified NPS for their respective employees and till October 15, 2010, 14 states have registered their nodal offices with 404,000 subscribers.

The issue of the failure of the four states is expected to be taken up at the annual conference of the finance secretaries of states and Union Territories, to be held on Monday.

The government had introduced NPS from January 1, 2004, for new entrants to central government services except the armed forces. In 2009, considering the need of pension for the unorganised sector is not well developed, the scheme was extended to that sector as well.

Finance Minister Pranab Mukherjee had further announced the “Swavalamban” scheme focused on encouraging workers from unorganised sector to subscribe to NPS. Under this initiative, the government will provide Rs 1,000 per year to each NPS account opened in the year 2010-11 and continue to do so for the next three years. Mukherjee had made an allocation of Rs 100 crore for the initiative in 2010-11.

He had also appealed to state governments to contribute a similar amount to the scheme and participate in providing social security to the unorganised sector workers.

As of now, Haryana and Karnataka have announced “co-contributory” schemes for specific occupational groups for the workers in the unorganised sector promising to contribute Rs 1,200 every year over and above the subscriber’s contribution under the “Swavalamban” scheme.

NPS is a voluntary defined contribution scheme, which any Indian citizen can join on payment of a minimum yearly contribution of Rs 6,000. The contribution to the NPS goes to the individual retirement accounts and is managed by the Interim Pension Fund Regulatory and Development Authority.