In December 2003, the National Democratic Alliance (NDA) government abolished the old pension scheme, replacing it with the National Pension Scheme in April 2004. This has not gone down well with the people of Himachal Pradesh - especially retired government employees.

CNBC-TV18's Santia Gora reports that demands to restore the old pension scheme (OPS) have picked up steam in the run-up to the state elections, and Congress has made this one of the cornerstones of its campaign.

The 62-year-old Hari Das who retired from Theog's Government Boys' Senior Secondary School after 24 years of duty as a peon has opened a tea and Maggi stall in Kufri. But this wasn't his original retirement plan.

Hari Das said, "My original retirement plan was to be at home and relax." He blames his return to a hard life on the central government's decision to abolish the old pension scheme and replace it with the National Pension Scheme (NPS).

His last drawn salary was Rs 25,000 a month and under the old pension scheme, he would have received half of that as pension -- around Rs 12,500 a month. However, under the NPS, state government employees contribute 10 percent of their salary to their pension fund. The state contributes an equivalent amount. This money is then invested in earmarked investment schemes and the returns on this will determine the pension payable.

Das said, "When I retired, I started getting a pension of Rs 1,301 per month and it’s difficult to survive with that amount."

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Hari Das is not an isolated example. There are at least 3 lakh employees in Himachal Pradesh who are demanding the restoration of the old pension scheme.

Considering their strength, these employees have the power to impact the election results by a huge margin. And these employees are clear that only those who can restore OPS will get their votes.

For the ruling BJP, this is a catch-22 situation. The old pension scheme was abolished by the NDA government in 2003, and bringing it back to the state will prove awkward. But with elections drawing closer, the state leadership is taking the issue seriously.

The chief minister of Himachal Pradesh Jai Ram Thakur said, "We are discussing the issue with the central government. We have said either work on an OPS formula or restore OPS."

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Congress on the other hand has already bitten the bullet. Vikramaditya Singh, Congress MLA from Simla rural said, "If brought back to power, restoration of OPS will be our first decision."

Restoration of the OPS will come with added costs for the state government. Experts estimate that it could result in a one-time expense of around Rs 2,000 crore and work out to a yearly recurring expenditure of over Rs 700 crore. With government employees making up over 5 percent of the state's electorate, this demand cannot be swept under the carpet.

First Published:Nov 9, 2022 11:19 PM IST