Mukesh Venu
The new scheme, to be implemented for government employees joining
service after April 1, 2013, showcases the changing stand of the
government through the changing times.
The ruling UDF
government has decided to implement the scheme of contributory pension to all
government employees joining service after April 1, 2013. While there have been
isolated voices of protest from the opposition side, it is pretty much certain
that the contributory pension scheme, which has been already taken up by the
Centre since January 1, 2004, is the path forward for the governmental bodies,
if they are to keep up with the changing times that have become increasingly
competitive over the years.
Contributory
Pension scheme involves two tiers - Tier 1 being mandatory and Tier 2 being
non-mandatory. In Tier 1, the account is a strictly a non-withdrawable account,
into which the person is required to remit 10% of his monthly earnings through
out his term of employment in the government sector. The government too would
contribute an equal share into the account. The amount can be withdrawn only
after the person reaches retirement age.
Each person is
obliged to do a minimum period of service for the government to be eligible for
receiving the pension through the Tier 1 account. Once withdrawn, the person is
also required to invest 40% of his pension money to purchase an annuity from an
IRDA (Insurance Regulatory and Development Authority) regulated life insurance
company. This would ensure that the person receives a fixed amount as pension
on a monthly basis for his/her lifetime and for his dependents.
The option of
having a Tier 2 account is left to the discretion of the employee and can be
used more like a personal bank account from which money can be withdrawn
anytime. There will be no contribution from the government's part towards this
account. There will be options to transfer money from Tier 2 account to Tier 1,
but not the other way around. There is also no minimum time period required in
service regarding transaction through the Tier 2 account.
At present, the
pension scheme involves the government virtually taking care of all its
employees all through their life after retirement, and after that, their
dependents. This scheme was devised at a time when the government operated
bodies were more or less the only source of employment for the people. Back
then, it automatically became the duty of a people’s representative government
to take care of its citizens who were reeling from poverty and unemployment.
The process of
globalisation saw the economy opening its doors to private investors and slowly
the government has been backing out - intentionally in some sectors, while
being forced in some others – from the different sources for revenue
generation. While the onset of private participation in sustaining the economy
has considerably lessened the burden on the government, with decreasing
revenues, it has also effected in the governing body loosing part of its lustre
and prominence as being the ultimate in the hierarchy of power.
The way out for
the government is to emerge stronger, with more influence and resources, and to
take the corporate giants at their own game. For this there is a dire need for
the government to find more money to make capital investments in vital sectors
with the twin interests of generating revenue and to maintain an influence over
the decisive factors regarding the state's economy. And the contributory
pension scheme is one of the steps initiated to bring more capital to the
government.
As stated in the
article released from the Chief Minister's office, Kerala has more pensioners
than employees. While the longer life span of Kerala's population is definitely
a factor for the rise of this situation, it has also to do with the fact that
the later generation of the population wasn’t solely dependent on the
government for providing them with jobs and a means of living. And Kerala at
present has one of the highest per capita income and per capita consumption
rate in the country. In short, the people are no longer dependent on the
government the way they were half a century ago.
The overall debt
of the state stands at Rs. 88,746 crores, with Kerala spending 90.34% of its revenue
on salaries, pensions and interests on debts. The situation cannot be allowed
to go on, because the very existence of the public sector is at stake. Till
now, the public sector has been relegated largely as 'non-competitive' sector
simply because it belonged to the government and the government never needed to
compete. But the emergence of private players with a prominence on par with the
government has brought in a situation where the government has no option but to
compete and get ahead to maintain its supremacy as the policy maker of the
state.
By implementing
the contributory pension scheme, the government is actually taking a step back
from what was considered its primary duty - that of providing financial
security to it citizens. But the move is only logical, one that is being
demanded badly by the changing times. Presently, the condition is such that the
government needs to take care of itself more than it needs to take care of the
people. So, to maintain the integrity and eminence of the governing body after
a period of sixty years, implementing of the contributory pension scheme comes
in as a move that is more a necessity than an option.
16.08.2012
http://www.yentha.com/news/view/4/contributory-pension-a-perspective
No comments:
Post a Comment