Rising Pension Bill

The steadily growing pension bill of the Jammu and Kashmir government is becoming a major financial concern for the Union Territory. Official projections show that pension expenditure is expected to almost double between 2020 and 2030, prompting authorities to rule out any possibility of reviving the Old Pension Scheme (OPS) due to the heavy financial burden it could place on the government.
According to data presented in the Jammu and Kashmir Assembly during discussions on a cut motion, nearly 2.48 lakh retired government employees are currently receiving pensions and related benefits from the administration. Providing for these retirees has become one of the largest recurring expenses for the government.
Figures show that pension spending stood at ₹5,829 crore in 2020–21. Over the years, the amount has steadily increased and is projected to reach nearly ₹11,798 crore by 2030–31. The rising trend is already visible in recent budgets. Pension expenditure climbed to ₹6,668 crore in 2021–22, ₹7,463 crore in 2022–23 and ₹8,364 crore in 2023–24. It further increased to ₹9,350 crore in 2024–25 and is estimated at around ₹9,127 crore in 2025–26.
Officials say the pension burden will continue to grow as more government employees retire in the coming years. However, they expect the liabilities to gradually stabilise sometime in the early 2040s.
In this context, the government has made it clear that there is no proposal under consideration to restore the Old Pension Scheme. According to officials, bringing back OPS would significantly strain the finances of the Union Territory, which already faces limitations in revenue generation and investment opportunities.
The administration argues that the New Pension Scheme (NPS), introduced in 2010, provides a more sustainable model. Unlike OPS, which guaranteed pensions directly from government funds without a dedicated corpus, NPS operates on a defined contribution system. Under this model, both employees and the government contribute to a pension fund that is professionally managed.
Officials also pointed out that Jammu and Kashmir has historically faced rising pension liabilities. For instance, pension expenditure nearly doubled earlier as well, increasing from ₹731 crore in 2004–05 to ₹1,495 crore in 2009–10.
Following a cabinet decision in 2009, the government formally shifted from the Old Pension Scheme to the New Pension Scheme for employees appointed on or after January 1, 2010, through amendments to the Jammu and Kashmir Civil Service Regulations.
At the same time, authorities have reiterated that the government remains committed to fulfilling its obligations to existing pensioners under the Old Pension Scheme. They say efforts are being made to ensure that rising pension liabilities do not come at the cost of developmental projects and public welfare programmes.
Officials believe that once the pension burden begins to stabilise around 2040, a larger portion of government resources will become available for development and infrastructure. Until then, managing the growing pension bill will remain a key fiscal challenge for the administration.