The Narendra Modi government on Saturday approved an assured 50 per cent of salary as pension for government employees under Unified Pension Scheme (UPS), which aims to provide assured pension, family pension and assured minimum pension. The new scheme will benefit 23 lakh central government employees.
The new scheme will be implemented from April 1, 2025 and employees will have the option to choose between the National Pension Scheme (NPS) and UPS. Existing central government NPS subscribers will also be given the option to switch to UPS. This UPS , in addition to gratuity will incorporate a lump sum payment after superannuation. Notably, UPS will also be applied retroactively to government employees who retired from 2004 onwards
While announcing the details of the scheme after the cabinet meeting, Union Information and Broadcasting Minister Ashwini Vaishnaw announced the UPS that government employees will now be eligible to get 50 per cent of the average basic pay drawn over the last 12 months before the superannuation as pension.
The Centre has constituted a committee that held 100 meetings with several top organizations, including the RBI and the World Bank, to make decisions on this scheme.
“Government employees have demanded some changes in the New Pension Schemes. For this, Prime Minister Narendra Modi constituted a committee under the chairmanship of Cabinet Secretary TV Somanathan. This committee held more than 100 meetings with different organisations and nearly all the states.” There’s a difference between how PM Modi works and the oppositions works,” Vaishnaw said.
“Unlike the opposition, PM Modi believes in holding extensive consultations. Following extensions consultations with everyone, including Reserve Bank of India and World Bank, the committee has recommended a Unified Pension Scheme. Today, the Union Cabinet has approved this Unified Pension Scheme, and it will be implemented in the future,” he added.
Under the assured pension scheme, the beneficiary will get 50 percent of the average basic pay drawn over the last 12 months prior to superannuation for a minimum qualifying service of 25 years. The pension drawn will be proportionate for lesser service period up to a minimum of 10 years of service. As a part of the assured minimum pension, the beneficiary will draw Rs 10,000 per month on superannuation after minimum 10 years of service. Under the assured family pension, the beneficiary will get 60 percent of pension of the employee immediately before his/her demise. The assured pension, assured family pension and assured minimum pension will receive benefits of inflation indexation. Dearness relief will be based on All India Consumer Price Index for Industrial Workers (AICPI-IW) as in case of serving employees.
There will be lumpsum payment at superannuation in addition to gratuity. One-tenth of the monthly emolument i.e. pay plus dearness allowance, as on the date of superannuation for every completed six months of service will be given. This payment will not reduce the quantum of assured pension.
Meanwhile, the state governments will also be given the option to opt for the Unified Pension Scheme. If state governments opt for UPS, then the number of beneficiaries will be around 90 lakh. According to the government the expenditure for arrears will be Rs 800 crore. The annual cost increase will be around Rs 6,250 crore in the first year.
Last year, a committee under Finance Secretary TV Somanathan was set up to review the pension scheme for government employees and suggest changes in the light of the existing framework and structure of the National Pension System. The finance ministry formed the committee after several non-BJP-ruled states decided to revert to the Old Pension Scheme (OPS) and calls by employee organisation for the same. Under the OPS, retired government employees received 50 per cent of their last-drawn salary as monthly pensions. The amount keeps increasing with the hike in the Dearness Allowness (DA) rates.
The Cabinet also approved the continuation of the three umbrella schemes, merged into a unified central sector scheme namely ‘Vigyan Dhara’ of the Department of Science and Technology (DST). . The proposed outlay for Vigyan Dhara is Rs 10,579 crore during the 15th Finance Commission period from 2021-22 to 2025-26. The scheme has three broad components -- science and technology institutional and human capacity building; research and development; and innovation, technology development and deployment.
Apart from that, the Union Cabinet also approved the proposal ‘BioE3 (Biotechnology for Economy, Environment and Employment) Policy for Fostering High Performance Biomanufacturing’ of the Department of Biotechnology. The main features of the policy include innovation-driven support to R&D and entrepreneurship across thematic sectors. Overall, this Policy will further strengthen Government’s initiatives such as ‘Net Zero’ carbon economy & ‘Lifestyle for Environment’ and will steer India on the path of accelerated ‘Green Growth’ by promoting ‘Circular Bioeconomy’. The BioE3 Policy will foster and advance future that is more sustainable, innovative, and responsive to global challenges and lays down the Bio-vision for Viksit Bharat.
Vaishnaw said, the BioE3 policy seeks to include innovation-driven support for research and development and entrepreneurship across thematic sectors.This will accelerate technology development and commercialisation by establishing biomanufacturing and bio-AI hubs and biofoundry, he said. Along with prioritising regenerative bioeconomy models of green growth, this policy will facilitate the expansion of India’s skilled workforce and provide a surge in job creation.
