Published Nov 17, 2023 | 3:13 PM ⚊ Updated Nov 17, 2023 | 3:14 PM
An image from the launch of the campaign. (Supplied)
The Foundation for Democratic Reforms (FDR) launched a campaign titled ‘The Inevitable’ at Ramanaidu Studios in Film Nagar in Hyderabad on Thursday, 16 November.
The organisers said that the initiative was aimed to raise awareness and sensitise the public about the “repercussions of the Old Pension Scheme (OPS)”.
Three short films were screened during the event to depict the inherent dangers of the OPS to the nation’s financial stability. The meeting was led by FDR General Secretary Dr Jayaprakash Narayana, former civil servant and MLA.
“These films emphasised the strain on the current and future taxpayers and the looming fiscal disaster affecting the lives of future generations,” said the organisers in a press release.
“The campaign seeks to raise awareness of pension liability and the detrimental impact of OPS on citizens, urging them to grasp the implications before the voting season,” it added.
During the session, Narayana spoke on the current fiscal position of governments, the impact of OPS, and the need to encourage citizens to cast their votes to oppose OPS.
Highlighting the need for awareness, Narayana said, “We aspire for individuals to make informed decisions before casting their votes, especially in the context of issues like the Old Pension Scheme. It is crucial to align ourselves with practical solutions that prevent huge and unsustainable burdens on taxpayers. This can be achieved by mandating contributions from both employees and employers during their active service.”
FDR expressed concern about the unfunded OPS, noting its challenges amid growing pension liabilities and the looming threat to the financial stability and credit of India.
“The OPS disproportionately takes away 18 percent of current tax revenue, unfairly favouring only 3.2 percent of the workforce while impacting the remaining 97 percent,” FDR said.
As people live longer and the number of retired people in the total population increases, most of our tax money will inevitably be directed towards retirement benefits. This trajectory is simply unsustainable and burdensome for the country’s already stretched fiscal situation.
“Transitioning back to OPS will plunge the country into a deep debt crisis. The financial strain would impede essential services like rule of law, healthcare, education, and infrastructure development,” the release said.
FDR highlighted the issue with reference to the state of Andhra Pradesh and said: “If the state reverts to OPS, the burden of salaries, interest payments and pensions will be about 220 percent of the state’s own revenues in 2041, and 294 percent in 2050. With OPS, the debt-to-GDP ratio will surge to 77 percent in 2040, and 107 percent in 2050.
Warning that the state would go bankrupt, the organisation said: “All citizens and employees will suffer serious hardship. Addressing this impending crisis requires urgent and viable solutions before it spirals out of control.”
Former Andhra Pradesh Director General of Police (DGP) Anjaneya Reddy, Rajya Sabha MP Vijayendra Prasad, and film director Tammareddy Bharadwaja also attended the event.
