Govt to contribute 14 pc to National Pension Scheme
IN A bonanza for Government employees, the Cabinet on Thursday raised the Government’s contribution to National Pension Scheme (NPS) to 14 per cent of basic salary from the current 10 per cent, sources said.
Minimum employee contribution will, however, remain at 10 per cent.
The Cabinet also approved tax incentives under 80C of the Income Tax Act for employees’ contribution to the extent of 10 per cent, they added.
Presently, the Government and employees contribute 10 per cent of basic salary each to NPS.
While the minimum employee contribution remains at 10 per cent, the Government contribution has been increased from 10 per cent to 14 per cent.
The Cabinet, headed by Prime Minister Narendra Modi, also allowed
Government employees to commute 60 per cent of the fund accumulated at the time of retirement, up from 40 per cent at present.
Also, employees will have the option to invest in either fixed income instruments or equities, sources said.
As per the Cabinet decision, if the employee decides not to commute any portion of the accumulated fund in NPS at the time of retirement and transfers 100 per cent to annuity scheme, then his pension would be more than 50 per cent of his last drawn pay, sources said.
The Government did not announce the decision in view of the ensuing polls in Rajasthan Friday. While the Government is yet to decide on the date of notification of the new scheme, sources said such changes usually come into effect from the beginning of a financing year, meaning April 1, 2019. This formula for changes in the NPS was worked out by the Finance Ministry based on the recommendation of a Governmentappointed committee. CABINET APPROVES SHAHPURKANDI DAM PROJECT: The Cabinet on Thursday approved the Shahpurkandi dam project on the Ravi river in Punjab, a move that will help arrest India’s share of water flowing into Pakistan, a statement said.
For this, a Central assistance of Rs 485.38 crore -- for irrigation component -- would be provided over five years from 2018-19 to 2022-23.
The Indus Waters Treaty was signed between India and Pakistan in 1960 for sharing of Indus waters. According to the Treaty, India got the full rights for utilisation of waters of the three eastern rivers -- Ravi, Beas and Satluj. “Some of the water of the Ravi river at present is going waste through the Madhopur Headworks downstream to Pakistan. Implementation of the project would minimise such wastage of water,” the statement said. In September, the Punjab and the Jammu and Kashmir Governments signed an agreement to resume works on the Rs 2,793-crore Shahpurkandi project. Though the work on the project began in 2013, it was halted due to certain issues raised by J&K.
The Punjab Government also submitted a revised cost estimate of Rs 2,793.54 crore and requested the Centre to include the project in the prioritised list of the Pradhan Mantri Krishi Sinchai Yojana.