Old Pension Scheme (OPS)
General Economics Intermediateपुरानी पेंशन योजना
Definition
OPS is a defined-benefit pension scheme where retired government employees receive 50% of their last drawn basic pay as monthly pension, with dearness allowance adjustments. The government bears the full cost from current revenue — no employee contribution required. OPS was replaced by NPS from 2004, but several states are reverting to OPS due to employee demands.
How Old Pension Scheme (OPS) Appears in India's Budget
The NPS vs OPS debate is a critical fiscal policy issue — OPS creates long-term unfunded liabilities while NPS has higher current-year costs.
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Why Old Pension Scheme (OPS) Matters
Understanding old pension scheme (ops) is essential for anyone following government finances, preparing for competitive exams, or analysing India's economic policy. This concept directly affects how the government allocates resources and plans its fiscal strategy.
In the context of India's Union Budget 2026-27, with a total size of Rs 53.47 lakh crore, terms like old pension scheme (ops) help citizens and analysts evaluate whether the government is on the right fiscal path. The numbers in the budget are only meaningful when one understands the underlying concepts.
For UPSC aspirants, old pension scheme (ops) is frequently tested in both Prelims and Mains, particularly in Paper III (Economic Development). For CA and MBA students, this concept appears in public finance and macroeconomics courses.
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