Pension bills surpass salary, wages bill of centre & 3 states: CAG report

With 67% expenditure on interest payment and loan payment service, pension comes next with 19%.

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Expenditure on pension has become an important part of the fixed expenditure for the Central and state governments in recent years, mentions the latest data published by the Comptroller and Auditor General of India (CAG).

According to the official data by CAG, the pension bill of the Central government was more than the expenditure on ‘salary and wages,’ during the year 2019-20. The data shows that the total expenditure was Rs 9.78 lakh crore. This total fixed expenditure of the Centre in 2019-20 was 37 per cent of its total revenue expenditure of Rs 26.15 lakh crore. The report by CAG also states that during 2019-20, the share of ‘interest payment and ‘loan payment service’ in the total expenditure (committed expenditure) of the Central government is 67 per cent, while the remaining 19 per cent is spent on pension, followed by ‘salary and wages’ making up 14 per cent.

Indian Express reported that, “The Committed Expenditure in respect of the Union Government consists of 67 per cent on interest payment and servicing of debt. The remaining 19 per cent and 14 per cent expenditure constituted the expenditure on pensions and salary and wages, respectively. It is apparent that expenditure on pensions is more than the expenditure on salaries and wages,” reads the CAG report titled ‘Union and State Finances at a Glance’ for 2019-20.

Furthermore, the report also says that the pension bill exceedes the salary and wages bill in three Indian states: Gujarat, Karnataka and West Bengal, during 2019-20.

In Gujarat, the cost of pensions (Rs 17,663 crore) was 159 per cent of the cost of salaries and wages (Rs 11,126 crore).

In Karnataka, the cost of pensions (Rs. 18,404 crore) represented 126 per cent of the cost of salaries and wages (Rs 14,573 crore). Similar to this, in West Bengal, the pension expense (Rs 17,462 crore) represented 103 per cent of the cost of salaries and wages (Rs 16,915 crore).

This occurs at a time when the Old Pension Scheme (OPS), which even sparked non-political discussions, was a key electoral pledge in the Himachal Pradesh and Gujarat assembly elections.

The OPS has already been approved for implementation in Rajasthan and Chhattisgarh, and may be implemented in Gujarat and Himachal Pradesh too.

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