Disastrous to revert to old pension scheme: SBI research

Reverting to the old pension scheme, commonly known as PAYG scheme, will be disastrous for the country's growth potential and the implicit pension debt will explode rapidly as population ages, an SBI Research note said on Thursday.

"We should not commit fiscal hara-kiri in the quest for populism. Otherwise it will be disastrous for the country's growth potential and at the same time place higher burden on our younger generation," SBI's chief economist Saumya Kanti Ghosh said, while batting changes to make the National Pension Scheme more attractive.

Recently, state governments of Rajasthan and Chhattisgarh have reverted to the old pension scheme where current revenues fund pension benefits.