Budget 2019 - Rs 3,000 Pension For Informal Workers Who Earn Upto Rs 15,000 Per Month; Know About It

4 Feb 2019 11:18 AM GMT
Budget 2019 - Rs 3,000 Pension For Informal Workers Who Earn Upto Rs 15,000 Per Month; Know About It
Image Credits: Wikimedia

Just a few months before the general elections, on February 1, Friday the acting Finance Minister Piyush Goyal, presented the interim and the last budget of the Modi government for the current tenure. Among the other sound good rollouts, the union minister announced, what he called the ‘mega pension scheme’. The scheme – Pradhan Mantri Shram-Yogi Maandhan (PMSYM). The scheme which is being hailed as something new by the ruling party is also being criticised by many, who are calling it ‘old promises in new scheme’. The trade unions and activists who are closely working with the unorganised sector workers claim that the present scheme will not be of much help and for aiming better results there have to be a few ramifications in the scheme.

What is the scheme?

“Half of India’s GDP comes from the sweat and toil of 42 crore workers in the unorganised sector working as construction workers, rickshaw pullers, rag pickers, street vendors, agricultural workers, beedi workers, leather, handloom etc. Domestic workers are also significant in number. We must provide them with a comprehensive social security coverage for their old age,” said Mr Goyal before announcing the pension scheme in parliament.

According to Mr Goyal, the PMSYM that might emerge as the world’s largest pension scheme in the next five years assures a monthly pension of Rs 3,000 to unorganised workers above the age of 60.

To avail, the benefits one who joins the scheme at the age of 29 would have to maintain a monthly contribution of Rs 100 and for those who join at the age of 18 would have to contribute Rs 55 and the total amount will then be added to their pension account. The scheme will cover workers whose earnings are upto Rs 15,000 said, Goyal. On Friday, while talking about the mega scheme, the minister said that the Centre has allocated Rs 500 crore for the scheme, which is expected to benefit 10 crore workers. The minister further claimed that the fund allotments could be increased if required. He added that the scheme will be implemented from the current year itself.

The pension scheme is not new, earlier Atal Pension Yojana, Pradhan Mantri Jivan Jyoti Bima Yojna and Pradhan Mantri Suraksha Bima Yojana were also rolled out to provide pension to the economically weaker section.

Since the time the minister announced the BJP’s mammoth scheme that would cater to the unorganised sector many have pointed out a few discrepancies in the scheme, and some have also called the scheme a “clever sleight of hands that offers nothing”. For now, there is limited information about the scheme.

Same as the Atal Pension Yojana

In 2015, the union minister Arun Jaitley had announced the Atal Pension Yojana (APY), a similar scheme as that of the present one. APY a pension scheme also covered the unorganised workers. Now that a new scheme has come in place, many argue that the new scheme is just an extension of the old APY.

Atal Pension Yojana offers fixed minimum pensions of Rs 1,000, 2,000, 3,000, 4,000 and 5,000 depending on the amount that has been contributed by its subscriber. Under AYP, the age limit for joining the scheme is 18- 40, which was duly criticised. For those who joined the scheme at the age of 18, can claim pension between Rs 1,000 and Rs 5,000, after a monthly contribution between Rs 42 and Rs 210 respectively and between Rs 291 and Rs 1,454 for those joining at the age of 40. The APY also mentions the need of mandatory bank account for the pension. As per the scheme, the government was to co-contribute 50% of the total contribution or Rs 1,000 per annum, for a period of five years.

Criticisms came by many

Even after the two years of the rollout, the scheme that caters at least 42 crores unorganised worked only covered 42.8 lakh beneficiaries till February 2017. In the budget 2019, the acting FM did not even mention the scheme and how it has performed in the last three years. According to the Pension Fund Regulatory and Development Authority, under AYP, 48% of the subscriber are those who opted for the lowest pension category of Rs 1,000.

Claiming that the new scheme does not have anything to add, the general secretary of the All India Trade Unions Congress (AITUC), Amarjeet Kaur said that the Employees’ Provident Fund Organisation (EPFO) already provides pensions to unorganised workers under various such schemes. While talking to The Wire, she says that if the government doesn’t have a clear strategy to expand the coverage or increase the amount, there’s nothing new to add.

Tapan Sen, General Secretary of the Centre of Indian Trade Unions (CITU) while criticising the new Pradhan Mantri Shram-Yogi Maandhan says that how will the workers who do not even have a steady income will be able to contribute monthly for the pension that they will get after the age of 60. He questions the government saying, “Will the government compensate for it? How will they be registered when they are frequently changing employment?”

While Kaur says that the pension of Rs 3,000 per month is very less for any worker. “The demand of these workers is Rs 7,000 and above as monthly pension for a dignified livelihood,” she told The Wire.

Economist and activist Dipa Sinha told The Scroll that the contribution of Rs 100 is a lot for poor people, which is why they can not commit it on monthly basis.“It is not feasible for them to think long term for the sake of Rs 3,000 at the end of it. What will the value of Rs, 3000 be when they turn 60? She said that poor people have to take care of their daily needs.

Many other labour activists who are criticising the ‘mega pension scheme’ says that providing pension is the government’s responsibility. No matter how small the contribution is, the workers shouldn’t be made to pay for it at all, says labour activist, as reported by The Wire.

Life expectancy is very low for the informal sector’s workers

The scheme is also being criticised for setting 60 years as the beneficiary age. Many critiques claim that by the time this pension scheme will get mature for the workers, many would not be alive to avail the benefits.

Scholars and researchers claim that the life expectancy for the people belonging to weaker socio-economic status is low in India. In our country, with people with ranging social-economic background, the life expectancy also varies. The life expectancy also varies in different gender, for now, the current average life expectancy in India is 68.8 years and for rural males, it is 65 years.

The unorganised sector works also have a large number of Scheduled Caste and Scheduled Tribe communities, who also have a distinctly lower life expectancy than that of normal upper-caste middle-class Indians.

Also Read: Budget 2019: Key Announcements Made In BJP’s Interim Budget

Suggest a correction

    Help Us Correct

    To err is human, to help correct is humane
    Identified a factual or typographical error in this story? Kindly use this form to alert our editors
  • *
  • *
  • *
  • Form Submitted Successfully
    Error in submitting form. Try again later


Ridhima Gupta Gupta

Ridhima Gupta Gupta


Ridhima Gupta Gupta

Ridhima Gupta Gupta


Next Story