NPS in Budget 2024: Finance Minister Nirmala Sitharaman may announce guaranteed returns under NPS in the budget. The Finance Minister will present the budget on 23 July.
The opposition has been supporting the Old Pension Scheme for a long time. Opposition governments in many states have also promised to bring back the old pension scheme. The Modi government does not seem to be in favor of this. But preparations to change the National Pension Scheme (NPS) to give higher pension to the employees have been going on for a long time.
Now it is expected that the government can make a big announcement related to this in the budget to be presented on July 23. The government can offer guaranteed returns in NPS. According to a report of the Times of India, central government employees can be promised to get 50 percent of their last salary as pension.
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Even in the current scheme, employees who stay invested for 25-30 years are getting good returns. Especially those employees who have joined after 2004. According to the report, the Somanathan Committee has studied the international practice of pension as well as the pension policy of the Andhra Pradesh government. This committee has assessed the impact of guaranteed returns.
Somanathan committee was formed last year
The government has been taking steps for a long time to make NPS attractive. The government is seriously considering that central government employees should get 50 percent of their last salary as pension. After an announcement by Finance Minister Nirmala Sitharaman, a committee was formed in the year 2023 under the chairmanship of Finance Secretary TV Somanathan. The job of this committee is to find ways to improve pension benefits under NPS without bringing back the old pension scheme. This committee was formed last year after the Congress announced to bring back the old pension scheme in many states. At that time the central government had refused to bring back the old pension scheme.
Difference between OPS and NPS
In the old pension scheme, government employees get half of their last salary adjusted with the recommendations of the Pay Commission as pension. In the old pension scheme, employees do not have to make any contribution for pension. Whereas the National Pension Scheme is a contribution based pension scheme. In this, the employee has to contribute 10 percent of his basic salary and the government contributes 14 percent. This amount is invested in various investment options and the employee gets pension from it.
