As per the decision, the State government’s contribution towards the NPS has been increased to 14 percent from the existing 10 per cent. Chief Secretary Suresh Mohapatra said the hike will be effective retrospectively from 01.04.2019.
“This Cabinet decision will ensure parity between the Central Government and State government employees. Odisha government will contribute Rs 280 crore more towards the NPS every year. Additionally, the State government will deposit an arrear of Rs 772 crore to benefit around 2.08 lakh government employees,” said Mohapatra.
Apart from this, the Cabinet has also approved to provide family pension if an employee dies during service period.
These benefits will be applicable and extended to eligible employees of Aided Educational Institutions, Group-B contractual employees, Group ‘C’ and ‘D’ contractual employees as well.
The State Cabinet also cleared the proposal to restructure the Odisha Civil Supplies Market Intelligence Service Cadre. A new cadre, Odisha Civil Supplies Market Intelligence Service (Recruitment and Condition of Service) Rules 2021 has been formed, he said.
Similarly, the Odisha Cabinet also approved the proposal to amend the Contractual Appointment Rules, 2013. As per the amended rules, the contractual government employees will henceforth be called ‘Initial appointees’ and the employees in Group B, C and D category of posts will be benefitted by the move.
If you are young, then definitely you should start planning for retirement from the initial days of your job.
Under NPS, investors can secure their retirement and can arrange monthly pension along with lump sum amount. By investing just Rs 74 a day in NPS, investors can get Rs 1 crore by the time they retire. NPS is a market-linked, retirement-oriented investment option.
NPS money is invested in Equity (share market and Debt), government bonds and corporate bonds. Investors have the option to decide how much of NPS money will go into equity at the time of account opening. Usually, up to 75% of the money can go into equity following which investors are likely to get slightly higher returns than PPF or EPF. For example,
if you are 20 years old and start investing in NPS by saving Rs 74 for the day; when you retire after 40 years, you will be a crorepati by investing just Rs 2,230 every month. Assuming a return at the rate of 9% total wealth of the investors will be around Rs 1 crore when they retire.
Suppose a 20 year-old invests Rs 2230 per month over investment period of 40 years with estimated return of 9%. After 40 years, the investor will receive Rs 92.40 lakh interest with Rs 10.7 lakh total investment. With this, the total pension wealth will be Rs 1.03 crore with Rs 3.21 lakh tax saving.
However, investors cannot withdraw all this money at once. They can withdraw only 60 percent of it and the remaining 40 percent they will have to put in an annuity plan, from which they will get pension every month.
Although it is a market linked product, it is possible that the returns may change.
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“The fiscal deficit is well within the permissible limit of 3.5 percent of GSDP. The present level of fiscal deficit is around 2 percent of Gross State Domestic Product (GSDP). The debt and GSDP ratio of the State is well below the permissible limit of 25 percent with present level at 14 percent. The tax and GSDP ratio is at 5.3 percent while the state’s own revenue and GSDP ratio is more than 7 percent,” Padhi told media persons after presiding over the annual review meeting of the Finance department at the State Secretariat here.
The major activities of the department like budget management, treasury management, loan & guarantee management, pension policy and pension disbursement, fiscal policy management, audit of local fund institutions, coordination with the Centre, RBI and Accountant General, coordination with banks, financial institutions and external donor agencies etc were reviewed in the meeting.
The Chief Secretary congratulated the department for reform measures already implemented and asked the officials to scale up such activities during the coming financial year.
The review revealed that Odisha has moved to online system of RBI named e-Kuber for all receipts and payments and has integrated it with IFMS. The facility for online submission of pension papers has also been provided in IFMS. The facility of online sanction of around 14 services including pension, provident fund etc have also been incorporated in IFMS platform. E-Transfer of PL accounts across treasuries has been made operational.
Principal Secretary, Finance, Tukihkant Pandey informed that the next step would be to leverage the system for online generation of cash book.
Padhi said the Finance department has performed well in the last fiscal year. The department has rolled out a set of reform measures for which Odisha has become a leading state in implementation of IFMS, PFMS and budget management. The department has also performed well in major fiscal indicators, he added.
Available data show that revenue from VAT & CST collected through Finance dept. has increased by 13.3 percent up to December 31 of the current fiscal year (2016-17) in comparison to the same period of the last fiscal excluding the revenue withheld by IOCL. The total collection from VAT & CST up to December, 2016 has been Rs 8759 crore.
The capital outlay and GSDP achievement till November, 2016 has been around 4 percent. The Finance department has implemented many institutional reforms. The integrated financial management system (IFMS) of Odisha has been nominated for award by a National Agency CSI-Nihilent. The prize would be received on January 27 at Coimbatore.
The budget speeches of 80 years from 1936-37 have been digitized and made available in the department website. The state project management unit (PMU) has been functionalized with a team of technical experts. Odisha is now one among nine leading states in the country with regard to roll out of Public Financial Management System (PFMS). The state has also received Best State Award-2016 for subscriber’s record maintenance in National Pension Scheme (NPS).
PFRDA Chairman Hemant Contractor made the announcement at a conference here on "Transferring Superannuation Funds to National Pension System" and said the pension regulator's board had already approved the change and it would be notified shortly.
"NPS is currently open for people between 18 and 60, and our Board has approved raising the age limit for joining to 65," Contractor said.
"The scheme anyway has the option of continuing and making contributions up to the age of 70," he added.
Explaining that the rationale behind government reforms in pensions is to facilitate "portability" -- or the transfer -- of superannuation funds by making the NPS more attractive and customer-friendly, he said the measures were designed to give the pension scheme an "unbundled architecture to make it as competitive as possible".
"The aim is to open up pensions to sectors that are without pensions," he said, noting that only 15-16 per cent of employees in India are covered by pensions because an overwhelming 85 per cent of the workforce is found in the unorganised, or "informal", sector.
Elaborating on the benefits of the NPS, Contractor said it is the "lowest-cost pension product in the world today".
"Costs are important because even one per cent difference in cost over 25-30 years, makes around 15-16 per cent difference at the end because of the compounding factor."
"Our fund management charges are a miniscule 0.01 per cent... the lowest, when you compare others charging 0.4 or 0.5 per cent," he said, adding that the NPS returns compare with the "best in the industry".
The regulator also said that PFRDA had asked the Central Board of Direct Taxes (CBDT) to provide a blanket approval for the transfer of superannuation funds to the NPS, but was still awaiting a response from the CBDT. He suggested that companies should individually take up this matter with the CBDT, as the PFRDA is yet to hear from the income tax department.
Contractor explained that NPS enjoys special privileges on income tax that are not available to any other capital market instrument.
NPS has emerged as a scheme for income security of senior citizens, said the PFRDA Chairman adding that it had seen "good growth over the last one-two years".
"Last year, the individual schemes grew by over 100 per cent," he said.
There are various investment options available to an NPS subscriber ranging from equity and secure government bonds to life-cycle funds. Equity investment of a subscriber's funds can go up to 75 per cent of their contribution if one chooses the life-cycle fund. It also offers less risky options with a heavy component of fixed income investment.
Chairman PFRDA Hemant Contractor made the announcement here at a conference on "Transferring Superannuation Funds to National Pension System", saying the pension regulator's board had already approved the change and it would be notified shortly.
"NPS is currently open for people between 18 and 60, and our Board has approved raising the age limit for joining to 65," Contractor said.
"The scheme anyway has the option of continuing and making contributions up to the age of 70," he added.
Explaining that the rationale behind government reforms in pensions is to facilitate "portability", or the transfer of superannuation funds by making the NPS more attractive and customer-friendly.
"The aim is to open up pensions to sectors that are without pensions," he said, noting that only 15-16 per cent of employees in India are covered by pensions because an overwhelming 85 per cent of the workforce is found in the unorganised, or "informal", sector.
Elaborating on the benefits of the NPS, Contractor said it is the "lowest-cost pension product in the world today".
"Costs are important because even one per cent difference in cost over 25-30 years, makes around 15-16 per cent difference at the end because of the compounding factor."
"Our fund management charges are a minuscule 0.01 per cent... the lowest, when you compare others charging 0.4 or 0.5 per cent," he said, adding that the NPS returns compare with the "best in the industry".