Sitharaman predicts India’s continued dominance in global economic growth

India’s economic ascent: Finance Minister Nirmala Sitharaman asserted on Wednesday that India is emerging as a global standout in economic growth and is expected to maintain this momentum in the coming years.

Balanced pension scheme

During her address, Sitharaman highlighted the recent approval of the Unified Pension Scheme (UPS) for government employees, stressing that it strikes a balance between the needs of government workers and taxpayers. The scheme aims to avoid imposing substantial pension liabilities on future generations.

“We are significantly ahead of many advanced economies, which are currently struggling with growth. India is demonstrating the fastest economic growth rate of recent years, and this trend is expected to continue both this year and in the foreseeable future,” Sitharaman said.

The Indian economy experienced an 8.2 per cent growth rate in 2023-24, with the Economic Survey 2023-24 forecasting a growth range of 6.5-7 per cent for the current fiscal year.

Sitharaman made these comments at the unveiling of NPS Vatsalya, a new pension scheme for children under 18 years of age. The scheme requires a minimum annual contribution of Rs 1,000, with pension benefits beginning at age 60.

She further said that the National Pension System (NPS) has provided competitive returns since its inception. For the government sector, the NPS has delivered an average Compound Annual Growth Rate (CAGR) of 9.5 per cent. In the non-government sector, the scheme has achieved a 14 per cent CAGR for equity, 9.1 per cent for corporate debt, and 8.8 per cent for government securities.

Unified Pension Scheme highlights

Regarding the upcoming Unified Pension Scheme, set to take effect on April 1, 2025, Sitharaman stressed that it incorporates the most favourable aspects of both the Old Pension Scheme (OPS) and the New Pension Scheme (NPS). 

It guarantees a pension equal to 50 per cent of the average basic pay over the last 12 months before retirement, with adjustments for inflation 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 effectively balances the needs of government employees and taxpayers, avoiding excessive pension burdens on future generations,” Sitharaman concluded.

She also reaffirmed Prime Minister Narendra Modi ’s vision for India to become a developed nation by 2047. “Achieving this goal requires visionary leadership and a government committed to serving the people. With these elements in place, we can create a better future for our children,” Sitharaman added.