Injudicious For States To Shift To Old Pension Scheme: N K Singh

It would be "injudicious" for state governments to give up the new pension scheme which was implemented after many deliberations, and such a move would put them under "difficulties and duress", 15th Finance Commission chairman N K Singh said on Friday.
     
The new pension scheme was adopted after extensive debate and deliberations, Singh said on the sidelines of an event organised by industry body CII.
     
Political parties such as Congress and AAP are promising voters to switch to the old pension scheme. In some states like Rajasthan and Chhattisgarh, Congress has already reverted to the old pension scheme, while AAP has promised the same in Punjab.
     
In the recently concluded state legislative election at Himachal Pradesh, reversion to the old pension scheme was a major poll promise by the Congress party, which got majority seats in the results declared on Thursday.
     
When asked about states reverting to the old pension scheme, Singh said: "It is an injudicious step to give up the new pension scheme and to go back and adopt the old pension scheme."
     
This was debated very carefully during the earlier government and former Prime Minister Manmohan Singh was one of the votaries, he said.
     
"My colleague Montek Singh Ahluwalia has commented extensively on the subject that it will be a fiscal disaster for the state to go back from the new pension scheme and adopt the old pension scheme," he said.
     
Some states, which are embarking upon it, would really be putting the state finances "under great difficulties and duress", Singh said, adding there is the sound economic logic behind the new pension scheme.