Kunal RastogiAIR 15 · CSE 2023 · 203 wordsTheir whole copy
Opening · a constitutional or legal provision
India being welfare state (Art 41 DPSP) is duty bound to provide social protection schemes to ensure adequate living wage. OPS was a step in this endeavour for govt employee.
Old Pension Scheme Fixed income of 50% of last drawn salary not market based entire burden on govt larger fiscal deficit
Social protection scheme essential for welfare Economy
Body · points and prose
- Ensures Social justice, poverty alleviation and financial inclusion
- Old Pension System → Helped protect old age people from destitute → enabled productive ageing (WHO) → Helped tide the rising Health cost
→ provided impartiality to govt servants towards public duty → secured wage.
Principles of fiscal prudence cannot be ignored
- High opportunity cost between Social Security & infrastructure creation.
- Burden on public exchequer. e.g OPS and other Social Security → 5.2% GDP.
- Misuse of Pension under OPS. eg → fake death certificates for continued pension.
- Exclusive in nature → Subsidy to rich.
- fixed OPS → cannot be invested in market security → idle money.
Close · a way forward
way forward → Renda Cicada model → Andhra model of flexible pensions are some measures to make pension Robust. Recently, constitution of Somnath Committee for pension reforms is step in right direction.