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Trouble may increase for states with old pension scheme! Will not be able to get additional loan from the center

Pankaj Prasad
Old pension scheme
Old pension scheme

The old pension scheme will put huge pressure on the coffers of the state governments and especially for a state like Punjab, it can be a cause of concern because Punjab already has a debt of thousands of crores.

Many non-BJP ruled states have announced to implement the old pension scheme in recent times. However, these states may face financial difficulties in the coming days as the central government has changed the rules, under which the states implementing the old pension scheme will get additional funds from the center for the financial year 2023-24. Will not be able to get loan. 

Explain that under the new pension system, the state governments give a fixed portion of their and the employee's salary to the Pension Funding Regulatory Development Authority, which is later given to the employee as pension. Under this, state governments can take additional loans from the Center under pension funding adjustment. This additional debt can be up to three per cent of the state's gross domestic product (GSDP). However, Rajasthan, Chhattisgarh, Himachal Pradesh, Jharkhand, Punjab have implemented the old pension scheme leaving the new pension system. In such a situation, the central government may refuse to give additional loans to these states in the financial year 2023-24. 

Under the old pension scheme, the government employee gets half of his last salary as pension after retirement. The old pension scheme will put huge pressure on the coffers of the state governments and especially for a state like Punjab, it can be a cause of concern because Punjab already has a debt of thousands of crores. Similar is the condition of Rajasthan. Now, if additional loan is not available from the Central Government as well, then it is a matter of concern for the State Governments. 

Many policy makers have expressed concern over the implementation of the old pension scheme by the states. The reason for this is that with the implementation of the old pension scheme, the states will have very little money left for health, education and infrastructure development. Montek Singh Ahluwalia, former chairman of the Planning Commission, has also expressed concern over the implementation of the old pension scheme by the states.