As reported first by the Indianmandarins, the Cabinet is said to have approved a proposal to increase the government’s matching contribution for NPS to every government employee to 14 per cent against 10 per cent earlier. This will benefit over 3 million Central government employees.

Another big benefit given to employees is that at the time of retirement, they can now withdraw up to 60 per cent as against 40 per cent. This would mean that the amount of mandatory annuity corpus will be 40 per cent of the retirement funds.

The government also proposes to bring tax breaks for the employee contribution towards NPS.

As some of these decisions require an amendment to the Finance Act, the Centre is likely to bring amendments in the Budget session.