A new proposal put forth by Andhra Pradesh state finance minister Buggana Rajendranath Reddy to appease the state government employees has caught the attention of the Narendra Modi government.
All over the country, the state and central government employees have been agitating for restoration of old pension scheme (OPS), in place of the new pension scheme (NPS), which has come into effect more than a decade ago.
Even in Andhra Pradesh, this demand has been constantly raised by the state government employees, as Jagan had promised, before last elections, to restore the old pension scheme.
On coming to power in 2019, Jagan realised that it is too difficult and burdensome to implement the OPS.
A few months ago, Buggana came up with a new proposal - Guaranteed Pension Scheme (GPS), as a midway solution between OPS and NPS.
This has now attracted the attention of the Centre as it is said to have the best of both the Old Pension Scheme (OPS) and the New Pension Scheme (NPS) elements.
According reports, the officials believe the scheme “is interesting,” although it needs to be studied in detail.
The scheme was proposed for the first time in April 2022 and offers a guaranteed pension of 33 per cent of the last drawn basic pay without any deduction to the state government employees.
For this, they would need to contribute 10 percent of their basic salary every month, and the state government will match it. If the employee is willing to contribute a higher 14 per cent every month, they will receive a guaranteed pension of 40 percent of their last drawn salary.
The market conditions will not influence the pension under GPS, which is nearly 70 per cent higher than the current pension being offered under CPS, in line with the current interest rates, Buggana said then.
Though the state government employees are not keen on having the GPS as well, they have no other option. At least, it is a little better than the NPS. If the Centre adopts the same, it would help them to some extent, say sources.
