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India Rules Out Old Pension Scheme Restoration, Advances Unified Pension Scheme

She told Parliament the new option under the government pension system will ensure assured retirement payouts with safeguards for fiscal balance

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Overview

  • Finance Minister Nirmala Sitharaman said there is no proposal in Parliament to restore the fiscally unsustainable Old Pension Scheme for central government employees covered by NPS.
  • Unified Pension Scheme, notified on January 24, 2025, offers guaranteed payouts equal to 50% of the last 12 months’ average basic pay after 25 years of service, with proportional benefits for shorter tenures.
  • Employees opting into the plan can access benefits under the CCS (Pension) Rules, 2021 or the CCS (Extraordinary Pension) Rules, 2023 in cases of death, invalidation, or disablement.
  • Household financial assets grew by 20.7 percentage points from March 2020 to March 2024, surpassing a 5.5-point rise in liabilities and lifting net savings from ₹13.3 lakh crore in 2022-23 to ₹15.5 lakh crore in 2023-24.
  • Scheduled banks’ retail loans rose to 31.48% of advances by March 2025 with annual growth easing to 14.05%, while gross NPAs held at 1.18% and unsecured exposures made up 25% of retail loans and 8.3% of total credit.