CFA Explainers
The Unified Pension Scheme (UPS) launched by the government as its compromise formula is being celebrated by the godi media as the “best of both worlds”, i.e. the Old Pension Scheme (OPS) and the New Pension Scheme (NPS). But a close scrutiny reveals otherwise, but before that, a little context will help. And like in most instances, a little bit of history helps.
The OPS was a welfare state modeled pension scheme wherein the state was supposed to take care of its employees. The so-called ‘pension reform’ pushed by the World Bank in the 1990s was done by raising alarm on the “financial strains” of such a state-funded pension model. The neoliberal prescription for the state was to shed weight and go lean. Sovereign countries were coerced to move to contributory pension schemes. And this is what gave birth to the NPS at the turn of millenia under Atal Bihari Vajpaee.
The employees and unions have long been vocal about the inadequacies of NPS. Facing pressure from opposition parties, especially the Congress, which has advocated for the return of OPS, the BJP-led government has now devised the UPS as a middle path. However, this move seems more about political expediency than about genuine reform, with the government caving to pressure rather than addressing the systemic issues within the pension system.
There is a lot of tension in the air about pension as the government has announced the Unified Pension Scheme (UPS).
▪️ What is the UPS and why is the Godi media celebrating it?
▪️ Is is actually an improvement on NPS?
▪️Why did we move away from OPS in the first place?
▪️What are the fundamental issues we are missing in this debate?
The Explainer attempts to deal with some of these questions.
Read and download the explainer here: The OPS, NPS, UPS Debate – Explainer