Reserve Bank warns states regarding Old Pension Scheme, says expenditure will increase manifold
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Some time ago many states have implemented the Old Pension Scheme. States like Rajasthan, Chhattisgarh and Punjab have implemented the Old Pension Scheme. It is believed that the old pension scheme can be restored in Karnataka also.
Reserve Bank of India has issued a new warning to the states regarding the Old Pension Scheme. The Reserve Bank of India has warned the states not to consider restoring the old pension scheme. If states reinstate the old pension scheme, their expenses will increase manifold. If their expenditure increases then it will be beyond the tolerance of the states. While giving advice to the states, the Reserve Bank has said that they should not make any promises to woo the public. Doing this can worsen the economic condition of the states. The bank has said that the old pension scheme can prove fatal for the government exchequer.
Old pension scheme is there in many states
Let us tell you that some time ago many states have implemented the Old Pension Scheme. States like Rajasthan, Chhattisgarh and Punjab have implemented the Old Pension Scheme. It is believed that the old pension scheme can be restored in Karnataka also. Meanwhile, the Reserve Bank supported the new pension scheme and said that the states should continue it. The Reserve Bank of India has given this warning while releasing its report State Finance A Study of Budgets of 2023-24. In this study, the Reserve Bank has said that if all the states of the country reinstate the old pension scheme, then the financial pressure on the states will increase by approximately four and a half times. Due to this, there will be a negative impact on GDP also. The Reserve Bank has warned that if this scheme is implemented, the burden of additional expenditure will be 0.9 percent of GDP by 2060.
According to the report of Reserve Bank of India, looking at the states which have reinstated the old pension scheme, many other states are also considering implementing it. The Reserve Bank has asked the states to stop doing this because it will increase the financial burden on the states. Implementation of the old pension scheme will hamper the pace of development. Due to restriction in the pace of development, the coming generations may also have to suffer a lot.
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