Official budget reports or financial statements from the Indian government

Modi Government Approves Unified Pension Scheme Offering 50% Pension for Federal Employees

Aug 25, 2024, 07:45 AM

The Indian government, led by Prime Minister Narendra Modi, has approved the Unified Pension Scheme (UPS) for federal employees, which guarantees a pension of 50% of the average basic pay drawn over the last 12 months before retirement, provided the employee has completed a minimum of 25 years of service. This decision allows government employees to choose between the National Pension Scheme (NPS) and the new UPS. The UPS is seen as a return to the Old Pension Scheme (OPS) with guaranteed benefits, sparking political debate. Critics argue it is politically motivated, especially with upcoming elections, and may increase the financial burden on states. Supporters, however, view it as a significant step towards ensuring financial security for retirees. The scheme's implementation is expected to increase the pension bill significantly by FY26, with potential political gains for the ruling party.