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PM Modi launches pension scheme aimed to benefit workers of unorganized sector

Amit Agrahari by Amit Agrahari
7 March 2019
in Economy
PM MODI, PENSION SCHEME

(PC: NDTV)

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PM Modi launched the Pradhan Mantri Shramyogi Mandhan Pension Yojana, a pension scheme aimed to provide benefits to the workers of unorganized sector. “This scheme is aimed at uplift of the section of society which has been ignored and left at the mercy of God,” said PM Modi. He also took a jibe at  Congress president Rahul Gandhi and said that poverty is just an opportunity to click photos for some people. “For them, poverty is just an opportunity to click pictures. Only those oblivious to sleeping hungry even for one night can think that it is a state of mind,” PM Modi added. This scheme is expected to benefit 10 crore workers of unorganized sector in the country.

Under the scheme, the unorganized sector workers will get a pension of 3,000 rupees per month. The scheme announced was in 2019 Budget. The retired senior citizen of 60 years or older could avail the benefits of this scheme. Piyush Goyal, interim finance minister who presented the budget allotted 500 crore rupees in this budget for the scheme.

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The scheme aims to benefit people who do not have social security or who do not fall under the income tax bracket. The plan to increase social spending would add to fiscal stress and limit the scope for infrastructure development. But by giving benefits mostly to informal workers who contribute to about half of the country’s GDP, it would enhance the quality of life and raise productivity. As of now, it is likely to add pressure on India’s fiscal deficit which is already under strain due to rising fuel prices. The fiscal deficit of the country is above the government target and one of the widest in Asia.

Previously, the government launched Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), a lucrative life insurance plan, wherein the insured receives Rs 2 Lakh cover against an annual premium of Rs 330, each year. The life risk cover will get terminated after 55 years. The scheme is applicable to all bank account holders in the age bracket of 18-50 years. Atal Pension Yojana(APY) is a pension scheme targeted at people in the unorganized sector. The scheme is applicable to subscribers aged 18 to 40 years, with valid bank accounts. 

The plan to provide social security benefits like insurance to poor people in the country could prove extremely beneficial for electoral gains as the party goes for Lok Sabha elections next year. The UPA government used MGNREGA to provide social security and the plan proved to be disastrous with emptying government coffers without any real change on the ground. The scheme failed due to massive corruption and extremely poor planning and implementation. The social security spending in the country is pitifully low with the majority of the people living in abysmal conditions.

This is the perfect time for the Modi government to plan for the social security of people as the country is young and productive. The country will be an aging society like China in 22 years if it doesn’t start working on social security today, the country is enjoying a demographic dividend at present, and therefore, the time is ripe to invest in the social security of the people to ensure a higher standard of living even as they age.

Tags: Modi governmentpension schemesocial security
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