Find less costly ways to address pension concerns than OPS: Raghuram Rajan

Former RBI Governor Raghuram Rajan has expressed his concern over the decision of some states to restart the old pension scheme and suggested that some less costly ways should be found to address the demands of government pensioners.

Rajan further said the old pension scheme does involve massive future outlays because of the indexation of pensions to current salaries.

"This is an enormous obligation, not necessarily in the short run, but in the long run," he said, adding obviously, state governments have to think through the long-term implications for government finances, and whether civil servants are the most in need of help among the constituencies they deal with.

Rajan, currently Katherine Dusak Miller Distinguished Service Professor of Finance at The University of Chicago Booth School of Business, said as he understands it, it may be infeasible technically or legally to move back to the old pension scheme.

"If so, there may be less costly ways of addressing the concerns that .