India stands out globally, will continue to grow at fast pace: FM Sitharaman

Finance Minister Nirmala Sitharaman on Wednesday said India is standing out globally in terms of economic growth and will continue to do so in the next few years. Sitharaman said the Unified Pension Scheme (UPS) for government employees approved by the Cabinet last month, balances the interests of government employees as well as taxpayers by not overburdening future generations with heavy pension bills.

“We are much better off than many other countries, even if they are advanced countries, today they are struggling to grow. We are standing out as an economy which is growing at the fastest rate in the last few years, this year and the next few years also for which we can do prediction,” Sitharaman said.

The Indian economy grew at 8.2 per cent in 2023-24. The Economic Survey 2023-24 tabled in Parliament in July projected the economy to clock 6.5-7 per cent growth this fiscal year.

Sitharaman was speaking at the launch of NPS Vatsalya– a pension scheme for children below the age of 18 years. The minimum contribution for the scheme is Rs 1,000 annually and pension would accrue after 60 years of age.

Sitharaman further said that the NPS scheme has generated competitive returns since its inception.

For the Government sector, NPS, on average, has given returns of 9.5 per cent Compound Annual Growth Rate (CAGR) since its inception. In the Non-Government sector, since inception, the permitted asset classes have delivered CAGR returns of 14 per cent for equity, 9.1 per cent for corporate debt and 8.8 per cent for Government Securities. With regard to the UPS for central government employees which will be effective from April 1, 2025, Sitharaman said it has the best elements of the Old Pension Scheme (OPS) as well as the New Pension Scheme (NPS), and it provides an assured pension after retirement.

Under UPS, government employees will receive a guaranteed pension amounting to 50 per cent of their average basic pay drawn over the last 12 months before retirement.

Additionally, the UPS scheme includes inflation indexation based on the All India Consumer Price Index for Industrial Workers (AICPI-IW).

State governments also have the option to adopt the Unified Pension Scheme.

“UPS balances the interests of government employees as well as taxpayers by not overburdening future generations with heavy pension bills,” Sitharaman said.

Sitharaman further said that Prime Minister Narendra Modi has a vision for India to be a developed nation by 2047.

“You need good, visionary leadership and you also need a government that works for the people. If we do have these combinations, it is possible to reach that state and give our children a better India to live in,” she said.