2020 CSG Contribution: “A Tax That Harms Workers” Says NTUC President

A week after the Prime Minister’s surprising statements in Parliament, the controversy over the General Social Contribution (CSG) continues to grow. The Prime Minister declared that “from a budget perspective, there will be no surplus after April 30, 2025.” He blamed poor management and public fund waste under the previous government for this situation. His comments have increased dissatisfaction among trade unions.

Narendranath Gopee, president of the National Trade Union Confederation (NTUC), is among the most vocal critics.

He has argued since 2020 that the CSG is a “Ponzi scheme” disguised as a social tax.

He claimed it’s unfair because it is directly imposed on workers without offering them long-term benefits.

“Since the CSG was introduced, I’ve spoken out against its injustice,” Gopee said. “It’s a tax on workers’ shoulders with no real return.”

Unlike the National Pensions Fund (NPF), which provided workers with a pension and retirement capital, the CSG only offers a basic pension.

Before the CSG, workers contributed to the NPF, a well-managed fund that invested surpluses to ensure long-term sustainability.

Today, contributions—ranging from 1.5% to 3% depending on salary—go into the CSG, which lacks a clear investment plan and is unsustainable. Gopee explained that the CSG contributions are not saved or capitalized.

Instead, the funds are used to pay various benefits, leaving the system bankrupt.

Since the CSG was merged into the Consolidated Fund, its actual balance has become opaque. “No one knows how much money is left,” Gopee said.

“The government claims there’s nothing remaining, confirming our fears about the lack of transparency.”

The situation is especially concerning for new workers who joined after the CSG’s introduction.

They won’t have access to the old NPF pension or initial capital, only the basic pension, which itself is now under threat.

Gopee pointed out that the original goal of the CSG was to increase the Basic Retirement Pension from Rs 9,000 to Rs 13,500 by injecting Rs 4,500.

However, that purpose has been diverted. Instead of securing retirements, the CSG is used for various other expenses.

He calls for the immediate abolition of the CSG in the next Budget.

“The government should fund social benefits through the Consolidated Fund, not rely on workers’ contributions,” he said.

“Workers contribute without seeing any benefits. It’s time to relieve them of this unfair burden.”

Source: l’Express