In Light of the Available Data and Facts, Should We Go Back to the OPS?

A few professors have filed a petition in the court for the release of their pension.

(Image: Muhammad Usaid/The Quint)

There are times when mere reporting is not enough for the media. Sometimes, it is necessary to use facts, data, common sense and logic to “inform” citizens that they are being hoodwinked by political rhetoric.

Such a time came in the aftermath of demonetisation when the rhetoric of the regime pointed out an array of “benefits”. Such a time came when a former Union Minister argued that there was no telecom scam as there was zero loss to the exchequer. Such a time has come when the TMC regime in Bengal insists the state is the safest place for women. Such a time has come when the BJP regime in Uttar Pradesh proposes a new law that will impose a life sentence on people posting "anti-national" content on social media platforms.

Sometimes admirably, and sometimes less so, the Indian media has gone beyond mere reportage to bring forth uncomfortable facts and home truths.

A similar data-based dose of home truth is badly required in the debate on pensions for government employees. There has been a lot of brouhaha recently over Modi 3.0 introducing the Unified Pension Scheme that will add more than Rs 6,000 crore this year to the pension bill.

Some have slammed the government for giving up on reforms. The Opposition has either mocked it as a surrender by a weak Narendra Modi government or slammed it as a gimmick. The demand and rhetoric for a return to the old pension scheme (OPS) is once again gathering momentum.

Once again, the author sees a lot of reportage on the demand with opposition leaders competing to promise a return to the golden era of pensions when an employee was guaranteed a lifelong pension (his widow getting a truncated amount). The blunt fact is that the Indian economy will go bankrupt if all central and state governments go back to OPS.

Beyond data and economic logic, the move will also be morally wrong as it will benefit a privileged minority at the cost of a more deserving majority.

The author would use the continuing controversy over the Agniveer scheme to highlight just how calamitous a move back to OPS would be. Sure, there are serious problems with the scheme as it stands and tweaks based on inputs from actual serving personnel need to be done on an urgent basis.

To give one example: technical personnel in the Air Force and Navy use highly sophisticated equipment that takes years to master and is constantly upgraded. How can they be effectively trained in a short-lived program? Yet, to go back to the OPS and completely scrap the Agniveer scheme would be suicidal. Five-year data on salary and pension bills of the Defence Ministry of India will tellingly reveal how.

Even a casual glance would tell a school student that there is something seriously wrong. For instance, for every Rs 100 that the central government was spending on paying salaries to officers and troops, it was paying almost double to retired veterans.

Look at it another way. By the time Agniveer was launched, pensions were eating up close to 30 percent of the total defence budget and three-quarters of the total salary budget. At this rate, the armed forces would have been spending most of their budgets on pensions with little left to buy guns, bullets, ships and aircraft. This nightmare march towards ruin was simply not sustainable.

In some form or other, an Agniveer was inevitable. The problem with this regime has always been a tendency to rely on riding roughshod with sudden announcements as a means of communication rather than having a dialogue patently with stakeholders.

It adopted the same approach as the three farm reform laws. The author is still convinced they would have immensely benefited small farmers in the long run. However poor messaging and communication led to its eventual withdrawal.

Charts similar to the one displayed here will reveal the common theme in every ministry of every government (central and state) if political rhetoric and unbridled populism take us back to the OPS era. That will be a path towards economic hara-kiri. Karnataka has already given us a glimpse of how the road to hell can be paved with noble intentions.

There is little doubt the five welfare schemes promised and implemented by the Congress in Karnataka are benefiting women, the poor, and the unemployed. But the cost is proving to be prohibitively high. The schemes together cost Rs 60,000 crores a year and there is no money left for anything else.

There is a moral reason too.

At best, government employees constitute between five to eight percent of the total workforce. The salary of the lowest-paid employee after factoring DA is higher than the per capita income of India. The other 90 percent plus of the Indian labour force which is poorly paid with no pension and no benefits deserves more attention and compassion.

In light of the available data and facts, it is economically suicidal and morally repugnant to go back to OPS.

(Sutanu Guru is the Executive Director of the CVoter Foundation. This is an opinion article and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)