The Central Government has announced the Unified Pension Scheme. After which the debate on pensions has heated up again. Not only UPS will be implemented from the next financial year, but the burden on the government will also increase. This burden may increase by more than Rs 6,200 crore. However, there has been a lot of discussion over the Unified Pension Scheme, National Pension Scheme and Old Pension Scheme in the last few days. But do you know why pension is important for a common man, especially for the working class? The question is also very important – how important is the pension scheme for the government? Let us try to understand it in the language of statistics – what kind of mathematics is there between pensions, the common man of the country and the government?
Different types of pension plans?
At present, there is a National Pension Scheme, an Old Pension Scheme and now a Unified Pension Scheme for the government employees and the government has also started the Atal Pension Scheme for the poor. By depositing a very small amount in the Atal Pension Scheme, you will be able to avail the pension after a period. This pension scheme has been designed for the people in the informal sector. Whose monthly income is very less. People between the age of 18 and 40 years can apply for the Atal Pension Scheme. Those who apply for this pension after the age of 60 years receive a pension ranging from Rs 1,000 to Rs 5,000. If someone wants to register for APY at the age of 18 years, he will have to invest Rs 210 every month.
From LIC to OSE
On the other hand, pension schemes are not announced only by the direct government, but government and private banks in the country also offer pension schemes. If we talk about the largest government lender in the country, the State Bank of India, then there is the SBI Life-Saral Pension Scheme. Anyone aged 40 years or above can invest in this pension scheme. This pension scheme also offers tax benefits.
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On the other hand, LIC’s Saral Pension Scheme is also quite popular. Both husband and wife can invest together in this scheme. To a large extent, it is similar to SBI’s Saral Scheme. Tax benefits are available in this pension scheme and can be started from the age of 40.
Why is a pension plan necessary?
The most important question is why is pension necessary? Can we not survive without pension? We all see, hear and read about retirement planning on TV, radio, internet and newspapers. Pension is an important part of this retirement planning. Government employees used to get pension after retirement, first through OPS and then through NPS. Now pension will be provided through UPS from the year 2025.
In fact, pension arrangements have been made to meet your expenses after retirement. Many pension investment schemes have also been given in the private sector. By investing in them, you can get a lump sum or an amount every month after retirement. This type of arrangement has been given in the schemes of many government banks and LICs. In fact, pension provisions have been made to make life easier after retirement.
Public spending on pensions?
Now let us also understand the expenditure incurred by the government on pensions. Which is very important. Its direct burden falls on the exchequer. If we look at the figures, the burden of pensions on the government has increased 4.4 times over the last 16 years, which is not minor in any case. In the fiscal year 2021, 25 percent more had to be spent on pensions. This was the period when the Corona epidemic was at its peak. In the fiscal year 2020, the government spent Rs 50,115 crore on pensions, which increased to Rs 62,725 crore in 2021. In which a continuous increase is being seen from the last three years. According to an estimate, the government will spend more than Rs 79,000 crore on pensions in the fiscal year 2024-25.
This will happen for the first time in four years.
The Unified Pension Scheme will be implemented in the next financial year. If experts are to be believed, this will be seen for the first time after the year of the coronavirus pandemic, when the pension expenditure will increase in double digits. If we try to understand it from the numbers, after the implementation of UPS, the burden on the government will increase by Rs 6,250 crore. This means that in the financial year 2025-26, the total government expenditure on pensions will exceed Rs 85,000 crore. This means that the pension expenditure will increase by more than 70 per cent from the financial year 2020-21 to 2025-26.
Most of it goes to OPS
If we try to understand the government figures, at present a large part of the pension expenditure goes to the Old Pension Scheme. On the other hand, 12 per cent is also deposited in the pension fund. If experts are to be believed, this figure could also increase in the fiscal year 2026. Earlier, in the fiscal year 2025, it was estimated that there could be a decrease of up to 1.64 per cent in the pension expenditure. Now, when UPS is implemented next year, there will be an increase. The Pay Commission will also have a very important input in this. The possible eighth pay commission is likely to come into effect from January 1, 2026. If the salary increases, the pension will also increase.
