By Bruhaspati Samal
A government’s priorities are often revealed by the contrast in its treatment of different sections of society. Two recent Parliamentary replies by the Minister of State for Finance present precisely such a contrast. Nearly 10 lakh crore in corporate loans have been written off by banks over twelve years, including 20,485 crore in 2025-26. Yet the government has stated that there is no proposal even to consider restoration of the Old Pension Scheme (OPS) for its employees. For large corporate borrowers, the financial system appears capable of absorbing enormous losses; for employees who devoted decades to public service, the government invokes “fiscal prudence.” The obvious question is: prudence for whom, and sacrifice by whom?
The RBI clarifies that a technical loan write-off is primarily an accounting treatment and does not extinguish the lender’s claim or prevent recovery. Nevertheless, 9.95 lakh crore written off over 12 financial years represents an enormous scale of financial distress and deserves serious scrutiny. The deeper issue is the asymmetry in public policy. Corporate distress is discussed in terms of restructuring, recovery, recapitalisation and economic revival. But when employees and pensioners demand predictable retirement security, the language changes to “fiscal burden,” “unsustainable liability” and “financial prudence.”
The issue is not whether every corporate write-off is a loan waiver—it is not. The issue is whether the State applies the same fiscal yardstick to corporate borrowers and its own employees.
The contradiction becomes sharper when fiscal indicators are considered. The Central government’s fiscal deficit declined from 9.2% of GDP in 2020-21 to 4.4% in 2025-26, while continued consolidation is projected. The government also highlights increased capex, resilient domestic demand and strengthening economic conditions. Fiscal sustainability is important, but fiscal prudence cannot become a selective doctrine applied principally to employees and pensioners. If resources can be mobilised for infrastructure, financial institutions and industry, the government must transparently explain why retirement security is supposedly beyond fiscal capacity.
The constitutional and judicial philosophy surrounding pension makes the matter even more significant. In Deokinandan Prasad v. State of Bihar, the Supreme Court rejected the notion that pension was a bounty dependent upon government grace and recognised it as a valuable legal right. In DS Nakara v. Union of India, the Constitution Bench described pension as a measure of socio-economic justice, not a gratuitous payment. The principle has been reaffirmed subsequently. In a 2023 Supreme Court judgment, pension was reiterated as a social-welfare measure rather than a bounty.
These judgments do not mean that the Constitution expressly mandates OPS for every employee recruited after 2004; that distinction must be acknowledged. But they establish an equally important principle: pension cannot be treated as charity or benevolence by the State.
The constitutional framework reinforces this principle. Article 14 guarantees equality before law; Article 16 embodies equality of opportunity in public employment; Article 21 protects life and dignity; Article 38 directs the State to promote social, economic and political justice; and Article 41, subject to economic capacity, recognises responsibility towards assistance in cases including old age. The Supreme Court has also recognised pensionary rights within the protection of property under Article 300A. Thus, while the Constitution may not prescribe one particular pension scheme, it places pension within a framework of legality, fairness, dignity and social justice.
Pension policy therefore cannot be reduced to a balance-sheet calculation alone. Against this background, the transition from OPS to NPS and subsequently UPS deserves serious democratic scrutiny. NPS shifted employees from the traditional defined-benefit model towards a contribution-based system, transferring a substantial portion of retirement risk to employees. UPS has attempted to provide greater assurance within a fund-based framework, but the fundamental question remains: Why should an employee who has surrendered decades of productive life in the service of the State bear a greater share of retirement insecurity than the State itself?
For a pensioner, a monthly pension is not speculative wealth. It is food, medicine, shelter, family support and dignity. It is deferred economic security earned through a lifetime of service.
Therefore, saying that OPS is simply “too expensive” is not an adequate policy argument. Every major public policy has a cost. Defence costs money. Infrastructure costs money. Corporate incentives cost money. Bank recapitalisation costs money. Tax concessions cost money. The democratic question is not merely, “How much will it cost?” but “What kind of society are we willing to pay for?”
If public resources can absorb massive corporate loan distress and support financial institutions and economic activity, why should the entire burden of fiscal discipline fall upon employees and pensioners? Corporate distress cannot receive greater compassion than the distress of a pensioner.
Fiscal prudence is necessary—but prudence must be universal, not selective. If the State can find resources to manage massive corporate loan distress, it must also find the political will to protect those who served the people.
The government should therefore reopen the question of OPS with seriousness and political courage and work towards a legally sound and financially sustainable pension framework. Restore the Old Pension Scheme—not as a favour, but as a solemn reaffirmation of the Republic’s commitment to dignity, social security and justice.
The writer is a service union representative and a columnist.