Twitter
Advertisement

Budget 2019: RS 500-CR SAFETY COVER – Pension plan is manna for daily wagers

A mega scheme for unorganised sector workers among poll doles

Latest News
article-main
FacebookTwitterWhatsappLinkedin

In this poll-bound year, a slew of sops have been rained on small taxpayers, especially middle and salaried classes and pensioners, in Interim Budget 2019-20. Chief among these is a Rs 500-crore mega pension scheme, dubbed the Pradhan Mantri Shram-Yogi Maandhan Yojana, to give a safety net to those working in the unorganised sector and drawing a monthly income of Rs 15,000 and less.

Finance Minister Piyush Goyal, who announced the Budget as Arun Jaitley is in the US for medical treatment, said during his speech: "Half of India's GDP comes from the sweat and toil of 42 crore workers in the unorganised sector working as street vendors, rickshaw pullers, construction workers, rag pickers, agricultural workers, beedi workers, handloom artisans, and other similar occupations. Domestic workers are also engaged in big numbers. We must provide them comprehensive social security coverage for their old age."

The proposed mega pension scheme will provide a pension of Rs 3,000 a month to the unorganised sector workers once they turn 60, if they make a small monthly contribution during their working age, Goyal said. A worker joining the scheme at 29 will have to contribute Rs 100 a month till they turn 60, whereas those joining at 18 will have to contribute a minimal Rs 55 a month. The government will deposit a matching share in the pension account.

At least 10 crore labourers and workers in the unorganised sector are expected to avail the scheme's benefits in the next five years, making it one of the largest pension schemes in the world.

"A sum of Rs 500 crore has been allocated for the scheme, which will be implemented from the current year. Additional funds will be provided as needed," Goyal said in his speech.

Finance secretary Ajay Narayan Jha told DNA Money that enrolment for the scheme will start from February 15. "The scheme will be implemented by the labour ministry with the help of Life Insurance Corporation (LIC). The ministry will collect the data and will start systematic enrolment for the scheme along with LIC, which has units all over. The people will be informed where the enrolments are taking place," Jha said.

Ashok Varma, leader, social sector, PwC India, said that the Pradhan Mantri Shram-Yogi Maandhan Yojana seems to be an extension of the existing Atal Pension Yojana. While APY was meant for workers in the unorganised sector, the new scheme includes marginal wage earners from the organised sector as well. "Another difference is the upper age limit of 60 years in the new scheme as against 40 years under APY," he said.

According to him, the move to provide social security to a large number of wage earners makes economic sense as it is contributory and is designed in line with the National Pension Scheme.

INTERIM BUDGET 2019-20

Rs 27.84L cr – Total Budget expenditure, up 13% from last yr

3.4% – Projected fiscal deficit for FY20; Target of 3% fiscal deficit to be achieved by 2020-21

Rs 3.36L cr – Amount at which Capital Expenditure for FY20 has been set  

Rs 3.27L cr – Allocation for schemes backed by Centre; on the rise from FY19

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.
Advertisement

Live tv

Advertisement
Advertisement