RBI cautions states against reverting to old pension scheme

Mumbai:The Reserve Bank has sounded a note of caution on reversion to the old pension scheme by some states, saying it poses a major risk on the “subnational fiscal horizon” and would result in accumulation of unfunded liabilities in the coming years for them.

The observations in the RBI’s Report titled ‘State Finances: A Study of Budgets of 2022-23’ comes in the backdrop of Congress-ruled Himachal Pradesh becoming the latest state announcing reverting to the Dearness Allowance (DA) linked Old Pension Scheme (OPS).

Earlier, governments of Rajasthan, Chhattisgarh, and Jharkhand informed the central government and the Pension Fund Regulatory and Development Authority (PFRDA) about their decision to restart the OPS for their employees.

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