Assembly polls: The age-old debate on OPS vs NPS is not retired hurt, yet

NMOPS swings for the fences as it attempts to hit a home run with a non-negotiable demand: restore the earlier pension scheme with fixed returns

‘Vote ki chot’ (assault on the vote) is set to become the central campaign point for the National Mission for Old Pension Scheme (NMOPS) in the upcoming five Assembly elections.

“We’re going to campaign with the slogan ‘Vote for OPS’,” said Vijay Kumar Bandhu, president of NMOPS, in an interview with Business Standard.

His voice still hoarse after the runaway success of a meeting at Delhi’s Ramlila Maidan last week, which saw a massive turnout.

With a membership of around 2.2 million state and central government employees, both serving and retired, Bandhu and NMOPS (which has a large membership of teachers) have struck a nerve that is politically painful for both the central and state governments.

The demand is non-negotiable: the government should revert to OPS with defined returns, and the central government should implement it first so that state governments have a model they can follow. Amendments or modifications will not suffice. This will be the central campaign point until the Lok Sabha (LS) elections.

The skittles are teetering; some have already fallen.

On September 12, the Sikkim government became the first state in the Bharatiya Janata Party (BJP)-led National Democratic Alliance coalition to announce it would revert to OPS, benefiting around 30,000 state government employees.

Five states — Rajasthan, Chhattisgarh, Jharkhand, Punjab, and Himachal Pradesh — have informed the central government that they intend to bring back OPS.

The Maharashtra government has set up a committee headed by the additional chief secretary to study the issue after Deputy Chief Minister (CM) Devendra Fadnavis conceded earlier this year that Maharashtra “is not entirely negative” on this issue.

After a lathi-charge at a meeting in Haryana earlier this year, the BJP-led Manohar Lal Khattar government has invited NMOPS for talks.

Minister of State for Finance Bhagwat Karad warned in a written reply to the LS during the Budget session earlier this year that the decision might lead to annual savings in the short run. However, he cautioned, “by deferring the current expenses to the future, states risk the accumulation of unfunded pension liabilities in the coming years”.

In the Rajya Sabha, former Bihar finance minister Sushil Modi emphasised that reverting to OPS would leave India in a financial mess worse than that of Sri Lanka.

“We are currently paying around Rs 5.76 trillion as central and state pensions. Eighty per cent of Himachal Pradesh’s own tax revenue goes to pay pensions. Bihar pays 60 per cent of its own revenue as pension; Punjab 34 per cent. If you add salaries and interest to this, many state governments will have nothing left from their own revenue. Come 2034, many state governments will be left penniless,” he warned.

However, NMOPS argues that what is good for the goose should be good for the gander.

“Let Members of Parliament (MPs) and Members of Legislative Assembly (MLAs) opt for the National Pension System (NPS) as well,” says Bandhu. “Then they will know.”

He cites the example of former Punjab CM, the late Parkash Singh Badal, who served multiple terms as MLA as well as MP and collected a separate pension for each term he had served.

“Badal saab used to get a pension amounting to Rs 5.75 lakh a month. The salary of the President of India is Rs 5 lakh a month,” Bandhu adds.

The poster child of NMOPS is Chint Ram Shastri, who retired from the Department of Education in Himachal Pradesh in July 2017 after serving for 13 years, 10 months, and 22 days. His salary at retirement was Rs 57,000. Under NPS (earlier New Pension Scheme), he received a pension of Rs 1,770 a month for the last six years. Now that Himachal Pradesh has implemented OPS, this month his pension was Rs 36,850. He became the first person in his village in Mandi district to benefit from OPS.

But the decision is a hard one for both the Congress and BJP.

The Congress has blithely announced that all its state governments will revert to OPS, even though the NPS was introduced by the government led by Manmohan Singh in April 2005. However, both the Udaipur Nav Sankalp chintan shivir of the party and the recent plenary at Raipur avoided any reference to pensions.

Party leader and economist Salman Anees Soz says, “Ageing is a problem worldwide, and people want the political class to answer how it is going to address this. The Congress is a big tent party, so there is constant debate on how far we can go and where we can go. It is all well and good to be fiscally prudent. But when you write off bank loans worth hundreds of crores, you have to answer how you are going to rejig the economy to take care of this vulnerable population.”

Soz’s solution is to recast the economy, including establishing a social security net that goes beyond welfare expenditure. He asserts that, as a share of gross domestic product, welfare spending has remained virtually stagnant, deepening inequity.

Meanwhile, the pressure on governments is growing.

Last week, a sitting Madhya Pradesh MLA from the BJP, Narayan Tripathi, wrote to Prime Minister Narendra Modi, seeking reassurance that the Madhya Pradesh government would revert to OPS. He has yet to receive a reply, but Congress chief ministerial hopeful Kamal Nath has promised that if the party comes to power, it will implement OPS.