Maharashtra Deputy Chief Minister Devendra Fadnavis on Friday supported the argument of former Deputy Chairman of the Planning Commission (now NITI Aayog) Montek Singh Ahluwalia in the Legislative Council in the Old Pension Scheme (OPS) case. Fadnavis was replying to a question by Congress member Rajesh Rathore about the state’s plans on implementation of OPS for teachers and state government employees joining the job after 2005. Recently, economist Ahluwalia had said that reintroducing OPS would be “a way to financial bankruptcy”.

Fadnavis said in the upper house, “Ahluwalia has said that re-implementing OPS will be like shifting the financial burden on the next governments. Salaries, wages and pensions already constitute 58 per cent of the annual expenditure of the state and are reaching 62 per cent. By the next financial year it will be 68 percent.

Under OPS, employees get a fixed pension. An employee is entitled to receive 50 per cent of the last drawn pay as pension. In the year 2003, the then National Democratic Alliance (NDA) government led by the Bharatiya Janata Party (BJP) abolished the OPS and the related order became effective from April 1, 2004.

Fadnavis said, “A large number of employees will retire in the year 2030. By then more than 2.5 lakh employees will be retired. At present some part of the pension amount deducted from the monthly salary is invested in the capital market. Most of the major countries follow this process.

Lakhs of teachers and government employees in the state are demanding the implementation of OPS. According to political observers, this issue played an important role in the recently held elections to the Legislative Council.

Fadnavis said, “I will hold a meeting with the teachers and the finance secretary to find out if there is a viable solution better than the National Pension Scheme.”

When Leader of Opposition in the Council Ambadas Danve asked how states like Rajasthan and Himachal Pradesh were planning to implement the OPS, Fadnavis said it may not be economically feasible to do so. Under the new pension scheme, employees contribute 10 per cent of their basic salary towards pension while the government contributes 14 per cent.

The Deputy Chief Minister said, “High returns are possible only in the capital market. There are certain rules and regulations to invest a part of the deducted amount (from salary) in the capital market.

He further said, “In the last five years, mutual funds have given 11 per cent return on investment. So, people should not be worried about it.”