Budget 2019: Sweat, toil and now pension for daily-wager

The web of social security woven by the Modi government through various schemes since it swept to office in 2014 has a new strand — pension coverage for workers in the informal sector.

The Pradhan Mantri Shram-Yogi Maandhan, unveiled in the interim Budget, aims to target 10 crore labourers in the informal sector over the next five years, making it one of the largest pension schemes worldwide.

“Half of India’s GDP comes from the sweat and toil of 42 crore workers in the unorganised sector working as street vendors, rickshawpullers, construction workers, ragpickers, agricultural workers, beedi workers, handloom, leather and in numerous other similar occupations,” the FM said in his speech. “We must provide them comprehensive social security for their old age.”

The Shram-Yogi Maandhan will cover those with monthly income of up to Rs 15,000, providing an assured monthly pension of Rs 3,000 after the age of 60 years. Those joining it at 29 years will have to make monthly contributions of Rs 100 per month till they are 60 while those subscribing to the scheme at 18 years will have to shell out Rs 55 per month. Government will deposit a matching share in the pension account of the worker every month.

The scheme caps the raft of social security measures including health coverage under Ayushman Bharat and life and disability coverage under PM Jeeevan Jyoti Bima Yojana and PM Suraksha Bima Yojana. Apart from insurance, government has cast the net wide for financial inclusion via Jan Dhan. It has also raised minimum wages for all labourers by 42% while the ceiling on Employees State Insurance scheme has been hiked from Rs 15,000 to Rs 21,000 per month. Minimum pension for workers under Employees Provident Fund is pegged at Rs 1,000 a month; in the event of death of a worker, sum paid by EPFO has been raised to Rs 6 lakh from the existing Rs 2.5 lakh. For ‘anganwadi’ and ‘Asha yojana’ workers, the honorarium has been raised by about 50%.