Prime Minister Narendra Modi will be chairing an important meeting with all leaders of central government employees to discuss Old Pension Scheme (OPS), New Pension Scheme (NPS), and the head-on eighth Pay Commission.
The current discussion has gained significance with assembly elections knocking at the door of Jammu & Kashmir and Haryana. The formal notice regarding this meeting was issued by the Ministry of Personnel on August 21.
Key Highlights of the Meeting
For the first time in ten years, the Prime Minister will interact with members of the National Council of Central Employees, also called Joint Consultative Machinery (JCM). Other important matters to be discussed would probably be:
- Old Pension Scheme (OPS) versus New Pension Scheme (NPS)
- Proposed reforms relating to the 8th Pay Commission
During the Budget Session, Finance Minister Nirmala Sitharaman hinted at possible reforms to the NPS, whereas Minister of State for Finance Pankaj Chaudhary clarified that the government does not consider the restoration of the OPS. This position had raised hackles among central employees.
AIDEF Boycotts the Meeting
The All India Defence Employees Federation (AIDEF), the second-largest central employee organization after railways, has stayed its participation. Keeping the NPS modifications high on the agenda instead of discussing OPS restoration is the reason given by General Secretary C. Srikumar for the federation’s stand against the meeting.
This is not AIDEF’s first instance of doing so: it too stayed away from a meeting held by the Finance Ministry on July 15 for the same reason.
Growing Demand for Old Pension Scheme Restoration
While the restoration of OPS is increasingly becoming a demand among all central government employees, it is intensifying among APS employees.
On February 29, 2024, employee unions wrote to PM Narendra Modi to seek the abolishment of NPS and the reinstatement of OPS. They also warned of an indefinite strike from May 1, 2024, if their demands went unheard. However, the strike was called off after the government assured them of further talks.
Committee Formed to Review NPS Reforms
In March 2024, the government set up the committee to assess NPS reforms under the chairmanship of former Finance Secretary T.V. Somanathan. The assessment included looking into international practices in pension systems and reforms done by the Andhra Pradesh government. The reports suggest that the government might recommend a pension of about 40% to 45% of the last drawn salary.
Recent indications now suggest that there is a possibility of giving a guarantee of 50% of the last salary as pension. To illustrate, when an employee’s last salary is considered ₹ 50,000, he shall get a pension of ₹ 25,000 per month.
What are the prospects?
Given that employee unions are adamant about the restoration of OPS and that the government side is in favor of NPS modifications, the coming meeting assumes great importance. The decision from there on could lay the foundations for pension policy concerning millions of central government employees.
As the negotiations go on, all gaze remain turned on the seat of PM Modi—whether the government will heed employee grievances or let the deadlock continue, who knows? Only time shall tell.