- Bruhaspati Samal -
The pension struggle in India is not merely a question of economics; it is a question of justice, of equality, and of the very soul of a welfare State. Since 2004, when the Old Pension Scheme (OPS) was dismantled and replaced with the National Pension Scheme (NPS), a storm of discontent has been brewing among employees and retirees. That storm has only intensified with the introduction of the Unified Pension Scheme (UPS) from April 2025 — a so-called “hybrid” model of OPS and NPS which in reality offers nothing more than an “option for payout, not pension.” Added to this betrayal is the Finance Act 2025, which retrospectively validates pension rules and arrogates to the Government unchecked powers to classify and differentiate among pensioners. Together, these moves have ignited a nationwide cry: restore the dignity of pension, restore justice to the workforce.
The Finance Act 2025 has struck at the very roots of equality. Chapter V, Part IV, Clauses 147 to 150 empower the Central Government to distinguish between pensioners on the basis of retirement date or Pay Commission recommendations. It declares that pension rules — the Central Civil Services (Pension) Rules, 1972, the CCS (Pension) Rules, 2021, and the CCS (Extraordinary Pension) Rules, 2023 — shall be deemed to have been in force since June 1, 1972. More dangerously, it asserts the Government’s absolute right to classify pensioners, to make or maintain distinctions among them, and to decide from which date revised pensions will apply. In other words, equity among equals — the very principle of justice — stands trampled under statute.
But the Constitution does not permit such injustice. The Supreme Court, in its historic judgment of D.S. Nakra vs Union of India (17th December 1982), held that pension is not a bounty or charity, but a deferred wage, a right attached to service rendered. The Court ruled that all Government servants under the same scheme form one homogeneous class, and any cut-off date to differentiate among them is unconstitutional. It further directed that pension revisions must extend equally to all, irrespective of retirement date. By ignoring this binding verdict, the Finance Act 2025 mocks the judiciary, mocks Article 14 of the Constitution, and mocks the very promise of equality.
For nearly two decades, since the advent of NPS in 2004, lakhs of employees and pensioners have fought relentless battles, demanding restoration of OPS. Their demand was clear: security in old age, protection against inflation, and dignity of life. Yet, instead of listening, the Union Government in April 2023 appointed a Committee not to consider OPS but to “improvise” NPS. From its recommendations was born the UPS, approved by Cabinet on 24th August 2024, which promised “Assured Pension, Assured Family Pension, and Assured Minimum Pension.” But the Gazette Notification issued on 25th January 2025 quietly replaced the word *pension* with *payout*. What was promised as pension security was reduced to payout uncertainty. UPS thus became nothing more than a hollow option under NPS, stripping away the very essence of social security.
The employees saw through this deception. Out of the 23 lakh employees expected to benefit under UPS, only 31,555 (1.37%) opted for it by 20th July 2025 (Lok Sabha Unstarred Question No.1152, answered on 28th July 2025). This massive rejection reflected the deep mistrust — over corpus sustainability, payout mechanisms, and lack of indexation. In OPS, pension means lifelong, inflation-linked income with family protection. UPS reduces it to a gamble with savings. No wonder employees turned away. Faced with this humiliation, the Government extended the option deadline to 30th September 2025 and on 25th August 2025 allowed a one-time switch back to NPS before retirement. But the damage was already done — faith had collapsed.
When confronted in Parliament, the Finance Minister on 11th August 2025 (Lok Sabha Starred Question No.308) bluntly ruled out OPS restoration, branding it “unsustainable fiscal liability.” This argument, however, crumbles before cold statistics. Between 2014 and 2024, the Government wrote off Rs.14.56 lakh crore in corporate bad loans and handed out lakhs of crores more as tax incentives to industries. Yet, the annual pension bill with OPS restored is only 0.9% of GDP. If the exchequer can indulge corporates with trillions, why is the worker’s rightful pension suddenly unaffordable? The truth is clear: fiscal prudence is a mask, fiscal injustice the reality.
Meanwhile, States like Chhattisgarh, Himachal Pradesh, Jharkhand, Punjab, and Rajasthan have formally decided to revert to OPS and sought refund of NPS corpus from the Centre. As of 31st July 2025, they demanded enormous sums: Rs.22,499.80 crore (Chhattisgarh), Rs.11,111.93 crore (Himachal Pradesh), Rs.14,368.67 crore (Jharkhand), Rs.31,960.43 crore (Punjab), and Rs.50,884.11 crore (Rajasthan). The Centre’s curt reply (Lok Sabha Unstarred Question No 3454 answered on 11th August 2025) was that the PFRDA Act, 2013 and related regulations prohibit refund of accumulated corpus. Thus, lakhs of State employees remain trapped within NPS, against both their will and their State Governments’ decisions. This is not just administrative rigidity; it is a direct assault on the spirit of federalism.
The employees and pensioners’ associations have long been advocating for a guaranteed, non-contributory old pension scheme (OPS). Their demand is not an unreasonable one. A fair pension system ensures that retirees are not forced to depend on their children or charity in their old age. By opposing this legislation, organizations such as the Centre of Indian Trade Unions (CITU), the National Coordination Committee of Pensioners' Associations (NCCPA) and the Forum of Civil Pensioners’ Association (FCPA) are fighting for the fundamental rights of India’s elderly citizens organizing massive human rallies and demonstrations at all levels, conventions and seminars in the state capitals including submission of memorandums to all concerned (PMO, Finance Ministry etc) through respective Governors and MPs. The government must listen to these voices and scrap the provisions of the Finance Act 2025 that promote discrimination among pensioners. The government must reconsider its approach and ensure that pensioners, who have dedicated their lives to public service, are not left abandoned in their twilight years.
This is not just a policy debate; it is a battle for dignity. The pensioner sitting at home is not begging for alms, but asking for his rightful wage deferred over decades of service. The young employee entering service is not seeking luxury, but security for the twilight years. Pay and pension are not fiscal burdens — they are lifelines, the oxygen of survival. To deny them is to betray workers, to betray justice, and to betray the Constitution.
A democracy that divides its servants into privileged and deprived cannot survive. A State that tramples the rights of its own employees while showering largesse on corporations is not a welfare State — it is a corporate State. Let it be remembered: a nation that betrays its workers betrays its very soul.
(The author is a Service Union Representative currently working as the General Secretary, Confederation of Central Govt. Employees and Workers, Odisha State CoC and President Forum of Civil Pensioners’ Association, Odisha State Committee, Bhubaneswar and a columnist. Mobile: 9437022669)
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