Even as a section of employees was in arms against the move to implement the Guaranteed Pension System (GPS), the Andhra Pradesh State Legislative Assembly passed the Andhra Pradesh Guaranteed Pension System Bill-2023 on Wednesday.
Finance Minister Buggana Rajendranath Reddy, who introduced the Bill, said that it entailed a financial implication of approximately ₹2,500 crore by 2040. However, the financial implication was contingent on and likely to vary based on the prevailing market conditions, return on corpus, salary growth rate, employee retirements etc, among other variable factors, he added.
The Minister said that there was a long-pending demand of the employees to review the Contributory Pension Scheme (CPS) and examine the demand for the Old Pension Scheme (OPS).
The GPS was formulated after several consultations at various levels with all the stakeholders as the subject pertained to the pension to be applicable to lakhs of employees, he said.
The Bill was being studied for many months by the government. The Cabinet sub-committee, officials examined various models before devising the GPS, he said.
Experts such as Atri Mukherjee, Rachit Solanki, Somnath Sarma, and R.K. Sinha, in their articles, expressed that it was difficult to continue the OPS in the future. The State government made sincere efforts in implementation of the National Pension Scheme (NPS) and the OPS.
If the OPS were to be continued obdurately, the government would not be able to pay salaries in the next 10 years. States such as Tamil Nadu and West Bengal were implementing the NPS with great difficulty, he added.
Mr. Rajendranath Reddy said that temporary satisfaction and celebration were not the government’s motive. The government would have approved the demand for continuation of the OPS had political necessities and elections been its priorities. But, the government was more concerned about the future generations and financial implications, Mr. Rajendranath Reddy said.
The government studied the HR policy, per capita income, expenditure, difference between OPS and NPS, and a hybrid model of GPS was planned as a via media solution, he said.
As many as 5,07,070 government employees were there in the State. While 2,02,520 were OPS employees, 3,73,770 were CPS employees. As many as 2,04,663 people were under regular pension and 1,69,107 under family pension scheme, he said.
The government would have to earmark ₹1.60 lakh crore on pension by 2060. If OPS were to be continued, the government would not even get debt by 2041, he said, adding that the entire nation would take a cue from the GPS.
