In big move, Himachal Pradesh restored Old Pension Scheme, CM Sukhvinder Sukhu calls it 'Lohri gift'

Before the Himachal Pradesh elections in November, Congress had promised to restore the so-called Old Pension Scheme (OPS) in its first cabinet meeting.

This was deemed to be a popular demand and expected to have affected some 1.36 lakh people and was seen as a key reason for the BJP's defeat.

The order has been effective immediately with benefits rolling out Friday, Sukhu told reporters, calling it a "Lohri gift" to the workers who have helped in the development of Himachal Pradesh.

Sukhu informed that the cost to implement the OPS for this year will be about Rs. 800 to Rs. 900 crores, which would be offset with measures like an Rs. 3 hike in Value Added Tax or VAT on diesel.

The Chief Minister also said the government would fulfil its promise of providing Rs. 1,500 per month to women and that a panel of ministers has been formed "to prepare a roadmap within 30 days".

A committee has also been tasked with executing the promise of creating one lakh jobs.

Attacking the opposition Bharatiya Janata Party (BJP), he said the state is under a debt of Rs. 75,000 crores owing to the "financial mismanagement and wasteful expenditure" by the previous government.

"Hard decisions will have to be taken as the government cannot run under huge debt," he said.

Many employees had been demanding the restoration of the Old Pension Scheme who joined government service on and from January 1, 2004, and were covered by a reformed programme that came to be known as the New Pension Scheme (NPS).

Under NPS, the government staff had to contribute a part of their salary for retirement benefits.

While under the old system employees with 20 years of service used to get 50 per cent of their last drawn salary as pension, the NPS scheme allows the government and employees to contribute 10 and 14 per cent of their salary respectively towards a pension fund.