New Delhi

Congress MP Manickam Tagore criticized Prime Minister Narendra Modi, suggesting that the introduction of the Unified Pension Scheme (UPS) was driven by Modi’s reliance on political allies to maintain power. Tagore noted that the BJP once praised the National Pension System (NPS) as a groundbreaking reform that benefited state finances.

The BJP had hailed the NPS as revolutionary for its financial benefits to state governments. However, they have now reversed their stance, Tagore told to source. He attributed this change to Modi’s weakened political position, citing a drop in BJP seats from 303 to 240 and Modi’s dependence on allies like Chandrababu Naidu and Nitish Kumar.

On Saturday, the Union Cabinet approved the Unified Pension Scheme, which will replace the NPS for Central government employees. Under the UPS, employees will receive a lifelong pension equivalent to 50% of their last salary, compared to the NPS, where pensions depend on investment returns from employee and government contributions.  The new UPS, effective from April 1, 2025, requires employees to contribute 10% of their salary to the pension fund. Unlike the Old Pension Scheme (OPS), which required no employee contributions, the UPS blends benefits from both the OPS and NPS, including fixed pension amounts and inflation-linked increases for employees who have served 25 years or more.