Letters: NPS - Time for a review | Business Standard

Letters: NPS - Time for a review | Business Standard

Unedited version of the letter published in Business Standard on August 21, 2013 is given below:

NPS: Time for review

This refers to the BS interview(August 18) in which PFRDA Chairman has asserted that ‘NPS is designed to offer pension to every worker.’ Perhaps, the questions posed by Sreelatha Menon were more informative than the evasive and vague answers given by Yogesh Agarwal. His counter to the first question, How can I have a view contradictory to what he (FM) says?’ sets the tone and content of his defence of NPS.

Though government and to some extent the media have been marketing NPS as a solution for social security problems of future ‘senior citizens’ of India, it is common knowledge that the scheme was introduced through back-door to get over the impossible task of starting to make provision for an estimated pension liability of nearly 4 lakh crore rupees when 6th Pay Commission was finalizing its report in 2006.

Other than the new central government employees who joined service from January 1, 2004 and others (state government and PSU employees) for whom NPS was made compulsory, effective various dates thereafter whose contribution adds up to about 85% of the Rs35,000 crore corpus mentioned by PFRDA Chairman, the receipt from the 90 per cent workforce outside the organized sector so far is admittedly too low at Rs5,000 crore.

Now, the effort will be to swallow EPFO and other organizations or departments which are otherwise doing well. It is time for a mid-term review of the whole concept of NPS.
M G Warrier, Mumbai



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