As several state governments have shown their intent of shifting to the old pension scheme, former RBI Governor Raghuram Rajan said that states doing so, would end up curbing current expenditure but may build liabilities for the future.
He also cautioned banks on tilting too much towards retail lending.
In an interview to an online portal on the sidelines of the World Economic Forum (WEF) at Davos, Rajan said that the reason why the new pension scheme was adopted because in the old scheme, huge liabilities had built up.
He further said that defined benefit schemes are easier for governments to ...
Source: Tehelka
