Pension bomb

BS OPINION

After all, in a country where over a third of ration shop supplies never reach their earmarked beneficiaries, or where half the subsidised kerosene supplies end up being used to adulterate diesel, what's so surprising about the same enterprising spirit being used to milk the pension scheme?

What is disturbing is that, despite the complex audit and vigilance system built up over the years, not even a hint of this has emerged from the audit of either banks (from where the pensions mostly get delivered), or of the pension office that authorises the transfers.

If two officers of the Planning Commission's perspective planning division smelt a big rat while just estimating the pension bill for the next decade, surely someone else more directly involved should have figured it out as well.

After all few, if any, other items of government expenditure would have grown by over 18 per cent annually for close to two decades. One possible reason for this, some argue, is that while the pension office audit assumes the banks' demands for transfer of funds for pensions must be accurate, the bank audit does not critically examine the pension accounts since this is not really the bank's core business.

It is this kind of gap in audit/scrutiny that allowed a Harshad Mehta to finance his bull run using bank funds, and indeed even an Abdul Karim Telgi to flourish "" after all, the reason why Telgi never got caught out was because no one tallied the amount of stamp paper officially printed with the stocks as well as the amounts of stamp paper received by various registrars across the country. If there was a system to do this, the obvious mismatch would have forced someone to examine just what was happening.

Equally shocking is the desensitisation of the system, such that it doesn't respond to major alerts. The first report made by the Planning Commission officials was in January 2002 (in the form of a working paper for the Planning Commission).

While this did not deal with all forms of government pension (for defence, railways, and so on), it did deal with civilian pensions.

And the report very clearly said that there were no complete data on the number of pension accounts, the number of switch-overs (when a government employee dies, his pension gets transferred to his wife, but with a 40 per cent cut), or even attritions (when both husband and wife die), so it was obvious that the system was open to abuse.

Hopefully, now that the full report on all forms of government pension is complete, and the findings quite unambiguously stated, some action will get taken.