Unfunded Old Pension Scheme Threatens State Finances: MoS Finance

• MoS Finance Pankaj Chaudhary warns unfunded OPS will severely pressure state finances, especially with increasing longevity.
• Reversion to OPS by states like Rajasthan, Chhattisgarh, and Punjab could constrain capital expenditure and create long-term fiscal liabilities.
• CAG reports highlight OPS as an unfunded defined benefit scheme, threatening State-level Fiscal Responsibility and Budget Management targets.
• RBI reports indicate short-lived annual savings from OPS reversion, leading to accumulation of unfunded pension liabilities in the future.
• SCBs and PSBs recorded highest ever aggregate net profit of Rs 4.01 lakh crore and Rs 1.78 lakh crore respectively in 2024-25.