Sitharaman additionally clarified that there will likely be no change in tax remedy underneath the UPS. (Photograph: PTI)
Union Finance Minister Nirmala Sitharaman on Tuesday mentioned the Unified Pension Scheme (UPS) is “not a compulsion for states”, as they’re able to taking their very own choices.
She, nevertheless, expressed hope that almost all states would undertake UPS “because it has quite a lot of advantages for workers”.
“The UPS is an try to enhance the present Nationwide Pension System (NPS). There isn’t any rollback or U-turn by introducing assured pensions underneath UPS. It’s clearly a brand new package deal,” Sitharaman mentioned in her first official feedback on UPS throughout a choose media briefing right here.
Earlier, the Congress had taken a jibe on the authorities, calling it a “rollback authorities” after the introduction of UPS. In response, Sitharaman known as the Congress a “naara (sloganeering) celebration”.
Sitharaman mentioned UPS goals to deal with points arising from the Outdated Pension Scheme (OPS) and the NPS. “The profit underneath UPS will likely be given on a pro-rata foundation if the service interval is lower than 25 years. The Pension Fund Regulatory and Improvement Authority will proceed to handle funds underneath UPS,” Sitharaman mentioned.
She additionally clarified there could be no modifications to the tax remedy underneath UPS.
In a big enhancement to pension advantages for central authorities workers, the Union Cupboard on Saturday permitted the UPS, which gives an assured pension of fifty per cent of the common primary pay drawn over the previous 12 months previous to superannuation, for a minimal qualifying service of 25 years.
Individually, discussing the upcoming Items and Providers Tax (GST) Council assembly scheduled for September 9, Sitharaman mentioned price rationalisation could be on the agenda. “Nevertheless, no resolution will likely be taken within the subsequent assembly. The group of ministers will maintain extra conferences to finalise the report,” she mentioned.
The UPS, efficient from April 1 of the subsequent monetary yr, will profit over 2.3 million central authorities workers, in accordance with the federal government. The pension quantity will likely be proportionate for shorter service durations, right down to a minimal of 10 years.
In accordance with the federal government, the expenditure for arrears will likely be Rs 800 crore with an annual price enhance of round Rs 6,250 crore within the first yr.
The scheme additionally contains two extra parts: household pension and guaranteed minimal pension.
Below the assured household pension element, the worker’s household will obtain 60 per cent of the speedy pension upon their demise. The UPS contains an assured minimal pension of Rs 10,000 per thirty days upon superannuation after a minimal of 10 years of service.
In March 2023, the Narendra Modi authorities had arrange a committee led by former finance secretary T V Somanathan to discover methods to reinforce pension advantages underneath NPS with out reverting to the fiscally unsustainable, non-contributory OPS.
First Printed: Aug 27 2024 | 9:11 PM IST
