00:00Now, Unified Pension Scheme is an excellent scheme by Modi government because it combines
00:05the best of both, how well you can execute your grand vision, that is what makes a policy
00:14successful or otherwise and I think this is where Prime Minister Narendra Modi wins hands
00:19down.
00:20He marries grand vision with seamless, seamless execution, there are 53 crore plus Jandhan
00:27bank accounts and if you notice under the Congress regime, the banking penetration was
00:34not even 41-42%.
00:35Hello and welcome to this very special broadcast on Unified Pension Scheme, you are watching
00:41One India.
00:42Joining us today is Sanju Verma, economist, ex-JP Morgan, Philip Capital and HDFC but
00:48she needs no introduction because the whole country has seen her as the national spokesperson
00:54for the BJP.
00:55Sanju ji, thank you so much for taking out for One India.
01:00Thank you for having me, Pankaj ji, pleasure and economy is a subject that's completely
01:05up my alley.
01:07Yes, definitely and that's why we wanted to explore this side of your expertise today
01:12and needless to say, the Unified Pension Scheme has become a reality.
01:17How in your opinion, Sanju ji, this UPS demonstrate the Modi government's commitment to both securing
01:26pensions and maintaining India's economic stability?
01:31That's an excellent question, very quickly, you know, we've had three pension schemes,
01:39you obviously had in the 1920s, the old pension scheme, which started way back in 1924.
01:44Then in April 2004, we kick-started when Atal Bihari Vajpayee was the Prime Minister,
01:49the National Pension Scheme, NPS, OPS, NPS, and now from April 2025, we will have the
01:55Unified Pension Scheme, UPS.
01:58Now the difference between the three, very quickly, is that OPS, there was no contribution
02:04by the employee, okay, it is a guaranteed pension scheme and the state exchequer bears
02:12the entire burden.
02:13Under the National Pension Scheme, what happened was that the government decided employees
02:19will contribute 10% of their salary every month, basic plus DA, and the government,
02:26state government, say Himachal Pradesh, which, you know, said it will implement the OPS ahead
02:31of elections.
02:32In NPS, the state government's contribution is 14%.
02:38Right, okay.
02:39Whereas in UPS, the government's contribution stands to be raised from 14% to 18.5%.
02:48So first and foremost, the OPS is not a participatory scheme.
02:55The employee does not contribute anything, but at the end of superannuation, he or she
03:01gets his or her pension based on DNS allowance, based on number of years of service, and based
03:10on his last drawn salary.
03:13Under the National Pension Scheme, the employee has to contribute 10%, the state contributes
03:2214%.
03:23So it is participatory in nature.
03:27Now, the UPS, the employee continues to contribute 10%, and the state contributes instead of
03:3414%, 18.5%, which is when the scheme will, you know, be implemented, that is from April
03:432025.
03:44The first difference we have to understand is that OPS used to be, entire burden used
03:50to fall on the exchequer.
03:52Yes, the government.
03:53It could be the central government or the state government, depending on, you know,
03:59whether you're a central government or a state government employee, who's availing benefit
04:04of OPS.
04:05Under NPS, the burden is distributed partially between the retiree or the employee and the
04:14central or state government as the case may be.
04:18Now Unified Pension Scheme is an excellent scheme by Modi government because it combines
04:23the best of both.
04:25On the one hand, like OPS, there is assured pension, there is family pension, there is
04:32minimum pension, and all the three are indexed in terms of inflation.
04:39So you're protected against inflation, you get a minimum amount at the end of your superannuation,
04:45depending on, you know, 10 years of service or minimum qualifying period of 25 years
04:50of service, what have you.
04:51And on the other hand, while giving you benefits like OPS in terms of stability, in terms of
04:58a guaranteed amount, in terms of a minimum amount, it also takes the best of NPS.
05:04How?
05:05Because in the NPS corpus, you invest at least 40% of the corpus in equity or market linked
05:14instruments, corporate bonds, annuity based scheme.
05:17When 40% of the corpus is invested, as per PFRDA guidelines, the Pension Fund Regulatory
05:25Development Authority of India, their guidelines, when you invest 40% of your corpus in equities
05:31or equity linked products or corporate bonds or high yielding debt instruments, the ability
05:36to generate return for the retiree, or for the employee at the end of his or her superannuation
05:43period, the ability to generate return increases manifold.
05:47So what happens is, like OPS, you get a stable return through UPS, but even under NPS, the
05:5640% corpus, because it will be invested in equity linked products, on the basis of that,
06:04the return you will get as a retiree, that will be far higher than OPS, because in OPS,
06:11you do not invest any part of your corpus in equity linked or annuity linked or corporate
06:17debt instruments.
06:18So you get a fixed amount.
06:20This is the case, best of both the worlds, what you were saying, it also has a history.
06:28I hope I made sense, Mr. Pankaj.
06:30You did, you did.
06:31Thank you so much.
06:32I mean, I'm sure if my clarity is, you know, better, then I'm sure the viewers and the
06:38readers would also benefit.
06:39One final question, Sanjay ji, that I want to take from you is the bigger picture looking
06:44at this unified pension scheme.
06:47There are certain other schemes also that this government has launched over a period
06:52of 10 to 11 years.
06:54Now, you know, sabka saath, sabka vikas ki baat toh hoti thi, usko ek tarike se match
07:00karne ke liye, jo bhi Pradhan Mantri Chandhan Yojana, ya phir Ayushman Yojana, jo launch
07:06aapko kya lagta hai, how does it unify this UPS, also works well with other welfare initiatives,
07:13which primarily, I would say, protects Modi government's intention for social security
07:19of the common man.
07:22Pankaj ji, you know, I think I am now wearing the hat of both an economist and a politician.
07:28And I'm so glad you asked me this question.
07:30Yes, yes.
07:31I'm a huge supporter of modinomics.
07:33And I always tell that, you know, good economics makes for good politics.
07:40I think where Narendra Modi stands out, and I don't say this because I'm the national
07:45spokesperson of BJP, I say this as a bona fide citizen.
07:50Yes.
07:50I think it's great to, I think it's great as a politician to have a great vision.
07:55It's great to dream big.
07:58But zameeni star par, how well you can execute your grand vision, that is what makes a policy
08:06successful or otherwise.
08:07And I think this is where Prime Minister Narendra Modi wins hands down.
08:12He marries grand vision with seamless, seamless execution.
08:17Jaise ki, I'll tell you, direct benefit transfer scheme was started in 2013.
08:23But under the Congress, it was a non-starter.
08:25Today, more than 34 lakh crore has been given into the bank accounts of beneficiaries directly
08:32via the DDT.
08:33Absolutely.
08:34Banking penetration, we've completed 10 years of Jan Dhan Yojana, Ankur ji.
08:40We've just completed 10 years of Jan Dhan Yojana.
08:43Today, the banking penetration rate is, you know, more than, you know, 85%.
08:50And there are 53 crore plus Jan Dhan bank accounts.
08:54And if you notice under the Congress regime, the banking penetration was not even 41, 42%.
09:01For the first 67 years of post-independent India, the first 54 years, it was Congress or
09:06Congress affiliated regimes, which ruled us.
09:10So look at the banking penetration, it was abysmal.
09:13You know, direct benefit transfer, the penetration was abysmal.
09:16I will give you a small example of a scheme called Jan Naushadi Kendras.
09:20Not many people talk about it.
09:22This was started way back in 2008.
09:27When Narendra Modi took charge as Prime Minister, there were only 34 Jan Naushadi Kendras.
09:33And today, there are more than 12,000 Jan Naushadi Kendras, which are either fully
09:39functional or which are close to being fully functional.
09:43And you get medicines in the Jan Naushadi Kendras, which are 50 to 75 in some cases,
09:5185 to 90% cheaper compared to market prices.
09:55We have seen these Jan Naushadi Kendras, the best part is they are in the,
09:58not tier one, tier two, tier three cities also have that.
10:01So the access to that is the cash.
10:03Yeah, exactly.
10:05And I'll just give you one last data.
10:08You must have seen, Himachal Pradesh had said we will implement OPS.
10:13You will be surprised to know, I have some data here.
10:16Just a few days back, the Congress Chief Minister, Mr. Sukhwinder Singh Sukhwinder
10:20in Himachal Pradesh has said, we will not take salary, we will not take MLA salary.
10:30It is because Himachal Pradesh is on the verge of bankruptcy.
10:34It does not have the means to even pay basic salary to government employees.
10:40That's the problem.
10:42Because OPS, I'm told, today accounts for more than 79% of Himachal Pradesh's tax revenues.
11:02Because every state government borrows money from various sources.
11:05How on earth will you have money to pay your employees?
11:10To pay salaries to state government employees.
11:12So Himachal Pradesh is a classic case.
11:19And one thing I would like to say is that OPS would have turned out to be a burden
11:24on future generations.
11:25You must have heard the story of the golden goose.
11:32The goose that lays a golden egg.
11:33And the farmer thinks, it's better to get one golden egg every day.
11:39Let me kill the golden goose.
11:41Maybe I can get a lot of golden eggs at one go.
11:44What happens?
11:45The farmer is disappointed to see that the goose has come out of his hand.
11:54So what I'm trying to say is that you have to be very practical.
11:59You have to ensure that you don't go overboard.
12:03You can't be the farmer who wanted to kill the golden goose to want all the golden eggs at one
12:09go.
12:10And Himachal Pradesh is a classic example where because of lack of practical approach
12:15and in wanting to appease vote bank, what Congress has done is it has pushed Himachal
12:20Pradesh, a beautiful state, into the throes of bankruptcy.
12:24So welfarism is a great policy.
12:27You have to adopt a welfarist approach in a country like India, which is what Narendra
12:32Modi government is doing.
12:33But while practicing welfarism, you cannot lose sight of the broader picture.
12:40You can't practice freebies in a manner that push your government into the throes of bankruptcy.
12:55And that's why I would say that BJP scores here because the fiscal prudence that we were
13:00talking about and, you know, promising freebies or services during election season is a different
13:07thing.
13:07But walking the tightrope is a totally different ballgame altogether.
13:11So thank you so much.
13:12I know your time is of essence even on the weekend for you.
13:16But nonetheless, thank you so much for speaking to One India.
13:18I really appreciate your presence here.
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