Union Budget 2024 | FM Nirmala Sitharaman says will evolve solution on New Pension Scheme to address relevant issues

New Delhi: Finance Minister Nirmala Sitharaman on Tuesday said a solution will be evolved with respect to the New Pension Scheme (NPS) that will address relevant issues and ensure fiscal prudence.

Last year, the finance ministry had set up a committee under Finance Secretary T V Somanathan to review the pension scheme for government employees and suggest any changes, if needed, in the light of the existing framework and structure of the National Pension System.

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Several non-BJP-ruled states had decided to revert to the DA-linked Old Pension Scheme (OPS) and also employee organisations in some other states have raised demand for the same.

In her Budget Speech in the Lok Sabha, Sitharaman said the Committee to review the NPS has made considerable progress in its work.

She said the staff side of the National Council of the Joint Consultative Machinery for Central Government Employees have taken a constructive approach.

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"A solution will be evolved which addresses the relevant issues while maintaining fiscal prudence to protect the common citizens," the minister said.

Under the OPS, retired government employees received 50 per cent of their last drawn salary as monthly pensions. The amount keeps increasing with the hike in the DA rates.

The Finance Minister also announced measures to improve social security benefits.

Towards this, she said deduction of expenditure by employers towards NPS is proposed to be increased from 10 to 14 per cent of the employee's salary.

Similarly, deduction of this expenditure up to 14 per cent of salary from the income of employees in private sector, public sector banks and undertakings, opting for the new tax regime, is proposed to be provided.

The Finance Minister also proposed to start 'NPS-Vatsalya', a plan for contribution by parents and guardians for minors.

On attaining the age of majority, the plan can be converted seamlessly into a normal NPS account.

Union Budget 2024 LIVE | Making a record for any Finance Minister, Nirmala Sitharaman presented her 7th consecutive Union Budget on July 23, 2024 under the Modi 3.0 government. This Budget brought tax relief for the middle class, while focusing on jobs through skilling, incentivising employers. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.