Will Himachal Accept UPS for Central Aid? State Yet to Respond
Shimla: The central government has written to Himachal Pradesh, offering financial assistance of Rs 1600 crore if the state implements the Unified Pension Scheme (UPS) for government employees. This proposal comes amid the state’s ongoing demand for Rs 9,000 crore, which represents the share of National Pension Scheme (NPS) funds deposited with the Center.
The letter suggests that bringing contract employees hired in 2022-23 and 2023-24 under the UPS framework would benefit the state. However, the Himachal Pradesh government, which recently reinstated the Old Pension Scheme (OPS) for 1.36 lakh employees, has yet to provide a formal response to the Center’s proposal.
Financial Challenges Mount; A Tough Decision Ahead
The state’s decision to restore OPS has led to accusations of financial restrictions imposed by the central government. Himachal’s borrowing limit has been capped at Rs 6,600 crore, and approvals for new externally aided projects have been restricted to Rs 2,944 crore until the end of the 2025-26 fiscal year.
The lack of the Rs 9,000 crore NPS refund has further complicated the state’s financial health. Officials argue that this amount is critical for addressing fiscal imbalances and fulfilling commitments.
While the UPS proposal offers immediate financial relief of Rs 1600 crore, it could signify a shift in pension policy for newly appointed contract employees. Accepting UPS may help mitigate the financial strain, but it could also draw criticism from employees and political opponents.
The Himachal Pradesh government faces a significant dilemma: whether to prioritize financial assistance from the Center by implementing UPS or to maintain its commitment to OPS, which was a key election promise.
As the state government deliberates its next steps, the central government’s proposal has added another dimension to the ongoing pension policy debate in Himachal Pradesh.
