Government allowed additional borrowing of Rs 60,000 crore to 22 states for the National Pension Scheme

Current Context: The Indian government approved an additional borrowing ceiling of over Rs 60,876 crore to 22 states for contributions to the National Pension Scheme (NPS) in the current financial year 2023-24.

• Here are some key points:
• Additional borrowing space: This extra borrowing is granted over and above the regular net borrowing ceiling for states, which is set at 3% of their Gross State Domestic Product (GSDP).
• Purpose of borrowing: This additional borrowing is specifically for states that are actively contributing to the NPS for their government employees. It essentially helps them bridge the gap between current expenses and pension liabilities.
• Benefits for states: This move provides relief to states concerned about meeting their pension obligations without exceeding their borrowing limits. It allows them to invest in the NPS and secure the retirement benefits of their employees.
• Benefits for NPS: Increased participation from states is likely to boost the overall corpus of the NPS, making it a more attractive retirement saving option for individuals.

Question:

Q.1 What is the primary benefit of this decision for states contributing to the NPS?
a. It allows them to avoid paying taxes.
b. It helps them attract more foreign investment.
c. It provides them with additional funds for infrastructure development.
d. It enables them to secure the retirement benefits of their employees.