OPS remains so near so far for government employees in Punjab

It has been over seven months from the time the 14-month-old Bhagwant Mann-led government announced revival of the Old Pension Scheme (OPS) for more than 1.75 lakh employees but its implementation is yet to see the light of day.

The reason: With the current whopping debt of Rs 3.12 lakh crore, the state seems heading for bankruptcy with increased borrowings and the freebies promised in the run-up to the elections like free water and electricity up to a limit.

The latest spanner is that the Central government has slashed the state's borrowing limit from Rs 39,000 crore to Rs 21,000 crore.

Amid the growing unrest among the employees over the inordinate delay in implementing OPS, the government now appears to be buying time over legal and financial constraints of implementing it.

The abnormal delay has given the opposition parties an opportunity to question its propriety.

Taking the lead, AAP rebel and Congress firebrand legislator Sukhpal Khaira said it has been more than six months since the state government issued notice to revive the OPS that was stopped in 2004 but there has been no further progress.

"Was it only a notification to procure votes in Himachal Pradesh and Gujarat?" Khaira asked.

Joining the issue, state Congress chief Amarinder Singh Raja condemned the Central government for slashing Punjab's borrowing limit by Rs 18,000 crore. "Owing to the AAP government's ill-conceived self-branding decisions, the BJP-led Union government has slashed Punjab's debt limit which will only add to the state's financial burden," he said. Officials in the state finance department admitted that the Centre's step to slash the borrowing limit is mainly attributed to the government's decision to opt for OPS, meaning that the state may stop contributing Rs 3,000 crore annually to the Pension Fund Regulatory and Development Authority (PFRDA) by reverting to the old pension.

The Centre has also stopped the grant of Rs 2,600 crore under the head of special assistance grant for development of capital assets and the grant of Rs 800 crore for the National Health Mission.

With an eye on the Gujarat Assembly elections, the AAP government hurriedly notified implementation of the OPS in Punjab last November. This is endeavoured to benefit more than 1.75 lakh employees, currently covered under the National Pension System (NPS). An additional 1.26 lakh employees are already covered under the existing OPS.

The government says the OPS scheme is expected to benefit more than 4,100 employees in the next five years. In order to ensure that the scheme is financially sustainable for the exchequer, the government will be contributing proactively to the pension corpus, which, initially, would be to the tune of Rs 1,000 crore every year. In addition, the current accumulated corpus with the NPS is Rs 16,746 crore, which the government has urged the PFRDA to refund but the Centre has declined.

Amid the rigid financial conditions and a worse than anticipated slowdown, the finance department officials are skeptical about the implementation of OPS, saying it would put additional stress on finances as the state debt is close to 180 per cent of its annual budget. They point out that the state is facing the daunting task of ushering in the much needed economic reforms as a major component of government earning and borrowing is meant for servicing debt rather than capital expenditure.

As per the state budget, the effective outstanding debt to the GSDP has been estimated to be 46.81 per cent in 2023-24. Despite tighter monetary conditions, the state is annually providing a power subsidy of Rs 7,780 crore to domestic consumers and Rs 9,064 crore on free power to farmers. The AAP government is providing 300 units of free power per month to domestic consumers as per its pre-poll promise. Nearly 90 per cent of the state's households are now getting zero electricity bills.

However, the party's much hyped pre-poll announcement of Rs 1,000 to every adult woman, a big drain on the exchequer, is yet to take-off.

Angered over the bureaucratic hassles over mentioning the detailed pension policy, some employees’ unions, under the banner of the Old Pension Restoration Struggle Committee, have been demanding timely implementation of the old pension scheme in Punjab.

They argue that the government's notification regarding the implementation of the old pension "is just a political announcement" as it did not specify how it would do so and from which date it would be implemented.

Employees of Punjab Roadways are not getting salaries on time. They say that with an eye votes, the government has extended free travel facilities to women but has not adequately compensated the roadways, resulting in huge losses.

An official, familiar with the developments, said that political compulsions and populist announcements have been taking a huge toll of the state's finances. They fear that this could take the debt beyond the projected Rs 2.52 lakh crore.