A notification circulating that the Tamil Nadu government has ordered to send a list of names of applicants who want to switch from the new pension scheme to the old pension system has created confusion among various parties.
Government employees have been protesting against the new pension scheme in Tamil Nadu for a long time. Not only in Tamil Nadu, protests against this have been held in many states of India.
Why are government employees protesting against this new pension scheme? What consequences will the government face if it brings back the old pension scheme? What is the confusion caused by the Tamil Nadu government circular and the government’s explanation for it?
Tamil Nadu Government Circular
Referring to the circular sent by the Additional Chief Secretary to the Government Secretaries, information started spreading on social media that the Tamil Nadu Government has ordered to send the list of applicants who want to switch from the new pension system to the old pension system.
As this is a long standing demand of government employees, this circular is a huge talking point among government employees. In this case, it is reported that this announcement of the government has been misunderstood.
Speaking to BBC Tamil about the matter, Additional Principal Secretary Muruganantham IAS said, “These details were obtained for a case related to the pension scheme of some employees who had received appointment orders before 01.04.2003 and joined service after 01.04.2003.”
Further, in his explanation in this regard, “There is a false message being spread on Twitter and some media that the government has asked for the details of the employees who are willing to switch from the new pension scheme to the old pension scheme.
This news is false and baseless. Only details of employees who have received court orders to switch to old pension scheme based on individual circumstances have been sought from the respective departments. This is not an announcement for the entire pension scheme.”
image source, SOCIAL MEDIA
What is the difference between the two plans?
The biggest difference between the new and old pension schemes is the amount paid to the beneficiaries. Under the old scheme, half of the salary earned by the employees on retirement is paid as pension.
For this no deduction shall be made from the wages of the employees during their working period. At the same time, 10 per cent of the employees’ basic pay and gratuity will be deducted in the new pension scheme. Also, a fixed pension will be available through the old scheme. But, the new system doesn’t work like that.
Why the old way?
Speaking to BBC Tamil about the demands of the Tamil Nadu government employees who have been fighting against the new pension system for a long time, Jacto Jio State Coordinator Ilangovan said, “Those who joined the service after 2003 will be covered under this new pension scheme. But the state government will give some things that the central government can provide under this scheme. Not paying properly. Even gratuity is not paid properly.
After a few years, what if the financial situation is not good enough and the company stops altogether? A financial crisis means that the government can put a ceiling on the amount of pension to be paid and use the remaining funds to benefit other pensioners.
Two months’ salary goes into tax on our purchases. Tax payable by government employees is a fixed source of revenue for the government. Our primary demand is that the old pension scheme should be implemented. If that is not possible, then the state government should provide at least the minimum pension announced by the central government without reducing it,” he said.
Is the old way possible again?
Mon. Valliappan
Economist Soma spoke to BBC Tamil about these pension systems and the re-implementation of the old system. Valliappan said, “According to the old system, according to the calculations made by the government, the employees are given half of their salary as pension at the time of retirement. An employee who receives his salary from the government for about 30 years, gets the pension for the rest of his life. For some, the pension period is even longer than the working period.
Over time the number of government jobs and the number of pensioners increased tremendously. Thus, the government has to provide both wages to employees and pension to retirees. All these can be provided directly by the government from its own funds. Between four and five lakh crores of rupees are spent annually on pensions across India. Governments have to spend this from their own revenue.
A substantial amount is allocated for this purpose in the budget every year. The new pension scheme was introduced in 2004 by governments to reduce this financial burden. After this, the new system is applicable to all the government employees who joined the service.
But now some states including Punjab, Haryana, Chhattisgarh have re-implemented the old pension scheme. Due to this, it is said that the financial burden of the state governments has increased. This is what Tamil Nadu Finance Minister Palanivel Thiagarajan also said.
Government employees are fighting for the old pension scheme. Many state governments have heeded this. DMK also mentioned this in its election manifesto. However, the Tamil Nadu Finance Minister is also saying that the government does not have the funds for this at present. The government itself says that it does not have money to pay for women’s rights. Therefore, going back to the old pension system will add more burden on the government,” he said.
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