The Hindu : National : No consensus on pension reforms

Online edition of India's National Newspaper
Tuesday, Jan 23, 2007
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National

National

No consensus on pension reforms

Special Correspondent

Left-ruled States block move

NEW DELHI: The United Progressive Alliance Government on Monday failed to arrive at a consensus on the thorny issue of pension reforms as the three Left-ruled states put up a stiff opposition to the New Pension System (NPS).

Briefing newspersons here after the conference on pension reforms, West Bengal Finance Minister Asim Dasgupta said: "We Left-ruled states [West Bengal, Tripura and Kerala] have opposed the New Pension Scheme...and conveyed our unified opposition."

Opposing a "cut" in salary and pension in the "absence" of government guarantees for retirement benefits in the new scheme, Dr. Dasgupta, while addressing the conference, said: "We are not in a position to accept the new scheme. We strongly urge that a more in-depth factual and analytical discussion is held before taking any further step towards the new pension system."

Dr. Dasgupta feared that opting for the scheme under NPS would definitely result in a cut in wages of employees to the extent of 10 per cent of pay, including dearness allowance (DA), throughout service. With the rise in the cost of living index, he said the pension would decline further, unlike in the case of the current scheme in which an employee gets 100 per cent neutralisation for increase in the index through DA relief.

"Thus, there is a serious loss to the employee insofar as his retirement benefits are concerned in addition to the loss that he has suffered through effective wage reduction during his service," Dr. Dasgupta said.

Noting the extreme volatility of the stock market, Dr. Dasgupta said that itself was a cause for serious concern over sustainability of the new pension scheme.

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