States Reverting to Unfunded Old Pension Scheme May Face Fiscal Pressure: MoS Finance

The Minister of State for Finance, Pankaj Chaudhary, informed Parliament that states reverting from the National Pension System (NPS) to the unfunded Old Pension Scheme (OPS) face significant fiscal challenges. This shift may increase long-term pension liabilities, constrain capital expenditure, and threaten state-level fiscal targets. States including Rajasthan, Chhattisgarh, Jharkhand, Punjab, and Himachal Pradesh have notified the government of this reversion. Reports from the Comptroller and Auditor General and the Reserve Bank of India highlight that short-term savings from OPS reversion could lead to greater unfunded liabilities and fiscal risks over time.