Before the general elections, RBI has warned the state governments not to start old pension schemes in the name of making populist promises. According to RBI, this will increase the financial burden on the states.
In some states, plans are underway to restore the Old Pension Scheme (OPS) and in many states this has also been done. These include Rajasthan, Chhattisgarh and Punjab. There is talk of implementing it again in Karnataka. In the new report of RBI, states have been warned against this. In the report ‘State Finances
: A Study of Budgets of 2023-24’ released on Monday, it has been said that if all the states reinstate OPS, then the financial burden on them will increase by 4.5 times compared to NPS.
The report says that the additional burden of expenditure from OPS will be up to 0.9 percent of GDP by 2060. According to the report, some states have restored OPS and some are moving towards it. If this happens, the financial burden on the states will increase and they will not be able to spend on development works.
According to the RBI report, OPS is a retrograde step and will undo the benefits of previous reforms. In the report, there is a fear that this will cause harm to the next generations. It has been said in the report that probably the last batch of OPS will retire in the beginning of 2040 and they will continue to get pension till 2060.
Pre-election suggestion:
Before the general elections to be held next year, RBI has given instructions not to implement OPS in the name of populist promises. It has also been said that states should think of ways to increase revenue at their own level. RBI has said that states should consider increasing earnings by increasing registration fees and stamp duty.
Tax administration should be better: The
report says that states should focus on strengthening their tax management to increase tax collection and prevent evasion. This will further increase the financial capacity of the states. Apart from property and excise, the report has asked to look at the tax imposed on automobiles. It has also been suggested to increase revenue by stopping illegal mining.
December 2023 Deadline! Complete these financial tasks by the end of December, otherwise…
