By
B.Sivaraman
If there is a single demand that
commonly figured in the recent protests of the Central and State government
employees, public sector workers in defence production, telecom, railways and
banks as well by some workers in the private sector, it is the scrapping of the
New Pension Scheme (NPS).
Though NPS was introduced in 2004, why
resistance to it is peaking in 2018? Since the NPS covers employees recruited
after 1 January 2004 and the age of retirement is 60, most employees are yet to
avail the new pension. But a few are retiring now and as per the NPS regime
they can withdraw 60% of their pension contribution in bulk and out of the
remaining 40% they get barely Rs.700 and Rs.800 every month as annuity after
remitting 10% of their salary for 15 years! So the paltriness of the NPS scheme
is gradually dawning upon them and so the anger mounts.
The National Federation of Indian
Railwaymen (NFIR) has announced protest demos against NPS before PM Modi’s
residence on 13th and 23rd of March 2019. They even threatened to take a call
on halting the trains. Earlier, on 16 November 2018, the Union Minister for
Railways Mr. Piyush Goyal was chased out from a function venue by railway
employees protesting against the New Pension Scheme (NPS) at Lucknow.
State government employees are also on
a war path. Andhra Pradesh government employees were on strike on 15 December
2018 and earlier launched a Statewide Guntur March on 24 October 2018 against
the NPS. The TN government employees and teachers had to call off their strike
opposing NPS only under diktats from the Madras High Court. Despite the Yogi
Government invoking ESMA, the UP government employees went on a long strike
against NPS that ended in the first week of February 2019.
Reverting to the old pension scheme was
a key demand when Maharashtra government employees went on a strike in August
2018, Uttarakhand employees in January 2018, Rajasthan employees in October
2018 and Odisha employees in September 2018.
On 16 February 2019, there was a
lachrymal wave over the tragic loss of lives of BSF jawans in Kashmir and some
political forces even tried to whip up war hysteria. But on 5 December 2017
when the retired BSF jawans staged on a demonstration as part of a joint demo
by retired employees of all Central Paramilitary Forces including BSF, CRPF,
ITBP and SSB against NPS, nobody in the media even took notice.
Conditions might not have matured for
a showdown with the government through an indefinite general strike on this
demand alone. But scrapping of the NPS was a prominent demand in the 2
September general strikes of 2015 &2016, and on 8–9 January 2019.
Why the employees are opposing the New
Pension Scheme?
Under the old pension scheme, the
minimum pension amount was pegged at 50% of the last salary drawn or Rs.9000
per month whichever was higher but NPS has no such floor.
Under the NPS, the government
employees would contribute 10% of their salary to the pension fund and the
government would make a matching contribution of 10%. But government would make
this matching contribution only in the case of government employees and not in
the private sector.
Under the old pension scheme, the
employees would get assured interest from the government for their accumulating
pension fund. But under the NPS, the workers’ savings would be invested in the
stock market and their pension amount would be decided by accruals from the
share market. Private pension funds would invest their money and make a profit
for themselves.
Unlike the old scheme, the new pension
scheme does not have a provision to provide monthly allowances to the
dependents after the death of the pensioner.
NPS has been made compulsory for all
government employees joining service after January 2014. But it is optional for
the private sector. No wonder, as on 30 April 2018, while the subscriber base
of government sector NPS was around 58 lakh with assets under management (AUM)
of around ₹ 2.03 trillion, the subscriber base for private sector was only
around 14 lakh with an AUM of ₹ 27,982 crore. Considering total the organised
sector employment of 27.5 million in 2008—17.3 million public sector and 10.2
million in the private sector—this means the NPS coverage of the private
organised sector workers is around 10% only.
The Seventh Pay Commission recommended
that the government should increase its contribution to 20% and suggested
formation of a committee of secretaries to work out the modalities for the
same. But Mr.Jaitley constituted a committee of handpicked bureaucrats and,
without even making public their recommendations, arbitrarily increased the
government contribution only to 14% on 10 December 2018. Over 40 years this
would work out to a heavy loss to the workers.
Take, for instance, the case of a BSF
commandant whose monthly salary is Rs.82,000. Starting at the age of 20, if
she/he invests Rs.8200 in a bank monthly recurring deposit at 8.5% compound
interest, she/he would accumulate a corpus of Rs.3,33,51,528 after 40 years. If
the government contributes 20%, the addition to the corpus would be Rs.6,67,03,055and
the pension after 40 years would be Rs.8,33,788 per month. If the government
contributes only 14%, the corpus would be Rs.4,66,92,139—or, Rs.2,00,10,916
less and the pension after 40 years would be Rs.3,89,101. Per month the worker
would be getting Rs.4,44,687 less. Assuming that he/she gets a pension for 10
years, he she would be losing Rs.5,33,62,440.Even without adding the loss on
the corpus, the commandant would be losing over Rs.5 crore on pension alone!
This is what the BSF second-in-command Mr. Neeraj Lakhanpal showed during his
stint at the Institute of Border Management and Strategic Studies which was
widely publicized by the media on 3 December 2017. Any tears to shed for this?
One would expect the central trade
unions to lobby with the main opposition parties to include restoration of the
old pension scheme as a top priority item in their manifestoes. Any new
government can ignore this demand only at its own peril. (IPA Service)
The post Demand For Scrapping New Pension Scheme Growing appeared first on Newspack by India Press Agency.
