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S.C.Maheshwari
05-12-2008, 07:25 PM
PENSION Not a burden on the Government :-
Pension is described in section 60 of the CPC and section 11 of the Pension Act There are three important features of ‘pension’. Firstly, pension is a compensation for past service. Secondly, it owes its original to a past employer-employee or master-servant relationship. Thirdly, it is paid on the basis of earlier relationship of an agreement of service as opposed to an agreement for service. This relationship terminates only on the death of the concerned employee. Scheme of payment of pension was introduced: as it was greatly advantageous to the government.(i) Government saved thousands of crores by stopping matching contribution to provident fund. (ii)One third the commuted part of pension was permanently retained by the government, till 1986 . Even after 1986 in restoring the commuted portion after 15years,govt.retains the substantial balance with itself ( As per calculations the amount commuted would be got back by the government in nine to ten years) (iii)Due to delayed payment of arrears govt. retains crores of rupees on a/c of death of pensioners/family pensioners during the intervening period. Thus enormous amount of money has been with the government for very long period. Had the government created a corpus out of these savings by proper investment, today pension would not have been a burden.
Friends , Inspite of clear ruling of Honorable S.C. on more than one occasion, (i)that pension is not a largesse instead; the concerned employee by the dint of his hard work has earned it.(ii)Pension is legally enforceable right in terms of proviso to Article 309 clause 5 and Article 146 ;of the constitution of India.{S.C.Constitution Bench.headed by C.J.I. Y.V. Chandrachud Judgement dated 17-12-1982 in Nakra,s case 5939-41/1980}
Government has been crying about increasing financial load of pension, forgetting all the time that during the service time of present pensioners., (i)They had to forego the matching contribution by the government to the Provident fund on account of which Govt. saved thousands of crores of Rupees. (ii) They were paid less than their counterparts in public sectors. When ever parity of wages, was demanded on the principal of equal work equal pay., Government declined it on the reason that, Government employees were entitled to pension after retirement, thus their salary could not be at par with PSU employees .
Each pay commission before recommending new grades took into account all the benefits/allowances and perks including the post retirement pension and other benefits.
That means we were paid less salary than entitled to based on equal work equal pay as compared to Public sector workers! Because we were to be paid pension Pensioner during his/her service life directly or indirectly always contributed towards pension to be paid after retirement (i) By forgoing government’s matching contribution to the provident fund (ii) By accepting lower salaries for equal work as compared to their counterparts in PSU (iii) By giving prime years of their lives to the government. Thus we are being paid pension out of our own money which was otherwise due to us ,Then why this hue &cry.(why I. Tax on pension?). Not even once .not evens the opposition., ever talk about, ever increasing load of pension &perks of politicians
We have therefore to be alert about the nightmarish ideas being deliberately being circulated that the Government has unnecessarily been burdening itself with wage, pension & DA Bill while the truth is otherwise.
In the last over two decades, the strength of employees is consistently coming down. In Railways alone, inspite of increase in network, increase in freight/passenger movement and consequent increased workload we have now 14 lakhs employees against 18 lakhs earlier. Considering that pension amount is only half the basic pay, HRA,CCA are not paid to Pensioners it can easily be seen that governments liabilities are much reduced & not increased . Had the Government taken care of the savings as brought out in foregoing paras, there perhaps would not have been any burden of pension.

We pensioners have therefore to take up on ourselves to establish the voice of reason & justice to protect our wellbeing and to an honorable existence as senior Citizens in free India.

S.C. Maheshwari
RREWA

sudacgwb
06-12-2008, 09:08 AM
Dear Maheswari!

Impressed by your long info in this new thread and thank you for your analysis of the facts to come to the conclusion that pension is not a burden to govt.

It is not out of contest to mention here the consolidated fund from which the govt runs is not an AKSHAYA PATRA and we can go on drawing and emptying the vessel with recoupment from deficit financing (printing of currency notes!) borrowing from within and from outside the country.

People felt they have unfettered rights on the water in their land and started using for survival to start with, abused it without concern for recharge to the (ground water) resources and the present situation has come with large parts of the country in the critical state as far as groundwater resources are concerned (result of draft exceeding the recharge resulting in the depletion of water table to such an extent most of the dug wells have gone dry.

Apart from knowing pension is a right, it will do lot good if the pensioners, who have gone through ups and lows of life cycle to be fair to govt, the exchequer in the following ways. I didnot mean they are not fair now but scope exists to show their contribution to the State:

1. To put their money only for higher rate of interest in the banks which is applicable to senior citizens
2. To pay the taxes honestly even WHEN SCOPE EXISTS TO CIRCUMVENT THE RULE
3. Collect the bills towards all purchases by paying taxes and be DIFFERENT than the young and the rest who prefer the obvious ways of buying
4. When earning while getting the pension, to show the income fairly EVEN WHEN scope exists to reduce the tax burden
5. (When the defense pensioner gets re-employed in the govt. his pension is reduced by 1/3rd and no DA is admissible as the same is paid by way of employment) the self employed who may be earning (un-organised sector) by consultation, etc etc to be honest to themselves while filing their returns
6. As the govt is taking care of it's ex-employees, to be benevolent to the needy in society to the less privileged ones cooly and quietly and to be DIFFERENT from their serving employees who will have an eye on sec 80-G while making donations

YES WE SHOULD KNOW OUR RIGHTS, LET US BE RESPONSIVE TO THE SOCIETY FOR THEIR benefit,

ss

vnatarajan
06-12-2008, 01:53 PM
Dear Shri Maheshwari,

You have made an excellent resume on the pension and a timely call to Pensioners to wake up and assert their rights.

As I have made out earlier, many Pensioners are not fully aware that it is their own money/ differed wages/ unpaid salaries which constitutes the INVISIBLE corpus held with the Govt. which is being paid back to them in instalments/ revisions/ DRs etc.

Simply because the Govt. is not able to make a precise estimate of the magnitude of this INVISIBLE corpus or the Govt. functionaries as of today do not want to carry out this exercise SEPARATELY, it is not necessary for the Pensioners to believe that the pension payments or a burden to the Govt. nor the so-called burden is "increasing"!.

In our country -India- it is the Government machinery and the Govt. servants (while in service)- are responsible for building up the inventory of natural resources (I take the lead because I am a Geoscientist- including Mr Sudha -for Ground Water) and more importantly BUILDING UP THE INFRASTRUCTURE like railways/ roads & highways/ communication systems like telephones-telecom and now satellite supported/ airports/ ports/energy resources- like hydel/thermal/ atomic energy projects/ dams & reservoirs/ steel mills/ cement-chemical-pharmaceutical-heavy machinery- automobile plants/ financial institutions like banks etc etc (list will run unendingly) which became the strong foundation for our GDP growth steadily- more accelerated in recent years after opening up by liberalisation/ globalisation. The component of ensuring internal/ external security and peace, for this growth is provided by the defence and other systems (like police/ para-military etc) and therefore they are also part of the whole contributing system, though indirectly. Our educational/ vocational training systems have also made significant contributions in building up a huge man-power of skilled and other categories, vital for growth of any sector.

The concessions and enjoyable advantages of these huge and invaluable natural/ infrastructural/ man-power resources have been the BLESSED privilege of the private sector who used to enjoy the major part of the spin-off benefits of the GDP growth in the form of enhanced emoluments, unbridled perks, periodic/ fat bonuses, CPF contributions, stock options etc etc. Whereas, much of the component of Govt. accruals were/ are being showered more on the agriculture sector or vote bank doles! Never was the need for deficit budgetting- if the Govt. was able to realise proper taxes from private sector or enforce realisation of all loans/ credits in time or take penal actions in every sector of relevance. Govt. servants - past/ present never got their due share all these years.

In spite of all the limitations and shortcomings, the vital point to realise is that todays GDP growth of 8 - 9% is achievable only because of the strong and ready resource/ infrastructure laid by our Govt. / Govt. servants - not because of any private sector (at least so far). You can also realise that the greater component of this GDP growth- upto 55%- is coming from the services sectors like IT/ ITES/ Telecom etc. and their establishment/ effectiveness/ functioning etc owe fully to the infrastructure laid by our Govt. like satellite systems/ telecom systems/ energy resources-grid network/ transport facilities etc. SHOULD NOT THE GOVT. SERVANTS-PAST & PRESENT HAVE A RIGHT & SHARE TO ENJOY THE BENEFITS OF THIS GROWTH?

Instead of viewing the rationale of rewarding the Govt. servants past and present (- I always include them because in future they will become "past") positively, our Govt. opted to carry out an exercise - "" A Study of Terminal Benefits of the Central Govt. Employees" as a part of the 6CPC agenda- by a reputed institute from Bangalore and it will be shocking to realise that major part of the study was focussed on GETTING RID of the pre-1.4.2004 pensioners because of the vocally orchestrated misleading slogan -"increasing expenditure on pension payments etc".

(It was good & wise the institute took the help of a few knowledgeable pensioners well-known to us).

The study did reveal that the pension expenditure is steadily declining and it is much less than 1% of GDP and within the next couple of decades it may fall to even 0.5 % of GDP. ( Expenditure on Govt. employees salaries etc may not exceed 2 % of GDP- this is for information of serving employees- PLEASE DONT FEEL GUILTY! It is because of your and our contributions the Nation is able to achieve 8 - 9 % GDP and why all the spin-off benefits should be enjoyed by private sector and/or only populistic-vote-bank oriented- sectors?)

Shri Maheshwari has also explained the Railways example - decreasing man-power vis-a-vis increased productivity/ surplus revenue etc,

Let us now see why the Govt. could not and would not be able to get rid of pre-1.4.2004Pensioners!

The corpus required to convert the past pensioners to the same category - Pay As You Go Scheme (New Pension Scheme), may be of the order of 3,35,000 crores at a moderate interest of say 6.5 to 7.0 % or so! IN EFFECT, PRE 1.4.2004 PENSIONERS may realise that this must be the dimension of the contributory component of the PF that has been built up invisibly and for which no account is available - as I make out!

WHO WILL GIVE THIS CORPUS?

Another avenue/ shortcut was tried (to build this corpus?)to syphon part of this money into stock markets to make "QUICK MONEY" at the risk of pensioners- but thanks to the stiff opposition from one of the ruling alliance parties, this step did not materialise. If this had taken place, part of our "INVISIBLE" corpus would have disappeared and OUR PENSIONS would have suffered reductions (as some people may even be satisfied with such an action!), instead of the FULLY ENTITLED, ELIGIBLE & RIGHTFUL increases (- with or without being useful to the society! I and my copensioners here do quite a bit to the welfare of sr. citizens here- to the extent possible- and that way we feel we are useful to the society).

I have not finished my write-up!
(Somebody calling me for help regarding her family-pension fixation by her bank- so I am off now- will catch up again on this "STICKY" thread)

We must keep the Pension system of ours intact till the last Pensioner of our category lasts! (may be 2067-69!)

Regards

vnatarajan

sudacgwb
06-12-2008, 02:18 PM
Dear MrVNatarajanji,

I appreciate and admire your in depth analysis of the facts regarding the pension payment. I endorse your opinion the govt has been forced to be fair to pensioners/family pensioners due to the sustained efforts of the full time efforts of people like you.

Pensioners are lucky to have people like you who are doing great service to the lot of pensioners.

As long as govt servants ensure greater revenue with lesser expenditure (you have quoted the observation of Maheswariji) we can expect good times ahead!

IN Today's world we cannot have un-limited deficit financing and feel we are prospering. Pl continue your commentary as I know it is based on indepth study and based on strong fundamentals.

ss

Kanaujiaml
06-12-2008, 02:55 PM
My dear Mr. Maheshwari, Mr. Sudacab, Mr. Natarajan. It is wonderful to see discussion on Pension. The people in general think that the pension is given as donation like it is given to widows and freedomfighters etc. Pension to Govt. pensioners, instead is deffered wages , returned by Govt. to pensioner, against withheld PF. It is now high time that the print and electronic media should understand this point. They should understand that even honorable Supreme Court accepted in its judgement that the pension given to Govt. pensidoners is "deferred wages". I am therefore, all praise for Mr. Maheshwari for starting discussion on such matter in this forum. I also appreciate Mr. Natarajan for his views expressed here in and in another thread, namely, injustice to pensioners. Regarding Mr. Suda Cab's suggestions, I would only say , we must follow the suggestion in its true sprit, though I am sure, pensioners are , mostly following these. Perhaps long spell of Govt. service, has already made them law abiding. In any case, listing of such things in the manner done by Mr. Sudacab, is praiseworthy. As I said elsewhere on this forum, these views and observations need publicising. Mr. Maheshwari may put them on rrewa.org website. There at least , a visitor to site would know the real position about pension. Besides, we may write letter to editors of important papers. I would very much appreciate your views on this, in this forum. Thanks a lot. M. L. Kanaujia.

sudacgwb
06-12-2008, 03:26 PM
Dear friends!

Continuing the topic:

I am sure but for the setback due to economic slowdown, our country also one day will have the SOCIAL SECURITY SCHEME which provides dignified living of not only pensioners, public/private workers but also the rest. An humble beginning was made in this direction with the introduction of employment guarentee scheme first in Maharashtra and later elsewhere also.

SS

vnatarajan
06-12-2008, 05:43 PM
Dear Mr Sudha

By far and large, a lot of pensioners/ family pensioiners are today struggling to meet their medical requirements and also the attendant problems, because of the nucleated state of families/ or not being able to coexist in joint families!

Many of my colleagues, Geoscientists/ Drilling Engineers, due to the obligations of field duties, could not find opportunities to buy flats/ plots in cities and today, at least 25% of them (mind that most of them are Sel. Gr. Directors/ Directors) do not have flats or houses oftheir own and they are reeling under the pressure of paying high rents!
At this advanced age they are not in a position to move out of cities like Chennai - because they will not have medical facilities! ON MY INITIATIVE, our FORUM and AIFPA made a plea for HRA for PENSIONERS wh was much appreciated- was not negated when the demand was made- but ultimately it did not figure in the final outcome!

As you observed, SOCIAL SECURITY has to come sooner or later- even for security reasons- but you know - many will know- it is the politicians who will not allow this to happen in this country! They are afraid that this will destroy their hold on the vote banks as well as the significant manipulations they can make by issue of bogus ration cards/ other ID systems. EVEN OUR SECURITY WILL BE VASTLY IMPROVED if every citizen is issued with a SOCIAL SECURITY ID as in Western and Europeon and tother countries.

As Mr Kanaujiami had observed- most of the Govt. servants do not enjoy the right respect in the society, particularly in the States segment- largely because of the image inflicted on them as a consequence of the actions of some unscrupulous politicians or due to the fact that very few of them could not overcome the temptations for easy money!

I am aware many of my retired colleagues pay their taxes regularly and fairly- in fact most!

At the same time I am aware- most of my "morning walk" friends- some even retired top administrators(?)- some retired CEOs of private companies- do not know what are the rates of income taxes to be paid!- They are not pensioners- but I know they are "CONSULTANTS" earning at least three times our pensions- of the higher category I mean!

So let us not make PENSIONERS feel guilty. Let us fight for just/ equitable pensions to all categories of retirees commensurate with their level/ length of service rendered to the Nation without any prejudice or discrimination.

regards

vnatarajan

(This is not a part of my previous write-up- which may start after soime gap)