Jammu, March 6 The pension bill of the Jammu and Kashmir government is set to double in the 10-year period between 2020-30, with approximately 2.48 lakh retired employees receiving allowances, officials said.
The Jammu and Kashmir administration also stated that there is no proposal under consideration to revive the Old Pension Scheme (OPS), asserting that it would be fiscally unsustainable in the long run and could pose significant risks to financial stability.
According to official data, Rs 5,829 crore were paid as pensions to retired employees in 2020-21, and the figure is set to increase to Rs 11,798 crore in 2030-31. This is according to a government response to a motion to reduce spending in the Jammu and Kashmir assembly recently.
The annual pension expenditure over the last five years has shown a steady increase – Rs 6,668 crore in 2021-22, Rs 7,463 crore in 2022-23, Rs 8,364 crore in 2023-24, Rs 9,350 crore in 2024-25, and Rs 9,127 crore in 2025-26.
Based on the number of employees retiring, the pension expenditure is projected to further increase in the coming years. It is estimated to be Rs 11,798 crore in 2030-31.
Officials said that the expansion in pension commitments may continue until the early 2040s, after which the burden is expected to stabilize as a large number of employees covered under OPS retire.
They said that the introduction of the New Pension Scheme (NPS) in 2010 provides a sustainable pension framework with effective fund management, unlike OPS, which does not have a dedicated pension fund.
They said that Jammu and Kashmir, being a region with modest revenue and limited investment opportunities, has witnessed disproportionate growth in pension liabilities in the past.
Earlier, pension expenditure had nearly doubled from Rs 731 crore in 2004-05 to Rs 1,495 crore in 2009-10, they said.
Following a cabinet decision in 2009, the government transitioned from a Defined Benefit Pension Scheme (OPS) to a Defined Contribution Pension Scheme (NPS) for all government employees appointed on or after January 1, 2010, through amendments in the J-K Civil Service Regulations, they said.
They further maintained that while fulfilling its commitment to eligible pensioners under OPS, the government ensures that development allocations and activities are not adversely affected. Once the pension expenditure stabilizes around 2040, proportionately more funds are expected to be available for the development sector, it added.