By B. Sivaraman
The vexed pension issue is making news again. The more prominently it figures in Modi Government’s scheme of things, the more contentious it gets. On August 9, 2019, the government announced Pradhan Mantri Kisan Maan-Dhan Yojana, a pension scheme for small and marginal farmers, an exact replica of the paltry scheme announced earlier for the unorganised labourers. If farmers in the age-group of 18 to 40 years start paying Rs.55 to Rs.200 for 42 to 20 years, at the age of 60 they would get Rs.3000 per month. This is passed off as an old-age security scheme for farmers. It has not dawned upon many supporters of the government that if a young farmer of 18 years starts paying Rs.55 a month from now on he/she can only get an amount after 42 years with which she/he can have not more than on square meal. That is monthly pension for you!
The interim budget of the NDA Government which announced Pradhan Mantri Kisan Samman Siddhi, a scheme under which the small and marginal farmers would get Rs.6000 per year in three instalments, put the number of small and marginal farmers in the country at 12.5 crore. Now the new Minister for Agriculture, Narendra Singh Tomar, who announced this pension scheme puts their number at 14.5 crore. A two crore jump in just six months! Worse, the initial target set by the government was to rope in only 2 crore farmers for this scheme.
The viability of the scheme got exposed in the very second month. As the government was supposed to contribute a matching amount, the first instalment was given to only 3.11 crore beneficiaries and the figure dramatically crashed to 2.66 crore beneficiaries in the second. This means 45 lakh enrolled beneficiaries dropped out the scheme in the very second month by not paying the second instalment, and this government expects14.5 crore farmers to pay regularly for 240 to 504 months!
Earlier, on July 22, 2019, the government notified Pradhan Mantri Laghu Vyapari Maan-Dhan Yojana, a similar scheme for small traders. Small traders with an annual turnover of upto Rs.1.5 crore can enroll in this scheme. Since, 20 lakh traders with similar turnover limit have enrolled for the GST composition scheme, a similar number would be covered under this scheme as well.
The response to the similar scheme announced for unorganised workers gives an indication about the fate of these schemes. Out of 1 crore informal labourers in Tamil Nadu, as estimated by the government, only 48,000 labourers have enrolled themselves for the scheme as of 7 July 2019. T.U. leaders however put the figure of total informal workers in the State at 2 crore. Not even 0.5% of unorganised workers have come forward!
The pensioners getting Employees’ Pension Scheme (EPS) which the government operates through EPFO were agitating on 15 July in different cities and have declared that they would observe 15 August as Black Day because the government failed to honour the promise of doubling minimum EPS from Rs.1000 to Rs.2000. Worse, despite the Supreme Court upholding the order of the Kerala High Court scrapping the ceiling of Rs.15,000 for calculating pensionable income under the EPS and ruling in April that 50% of the last drawn salary should be the basis for calculating, the government has been dilly-dallying and not implementing the apex court order.
While earlier the governments were paying 50% of the last-drawn pay as pension from their own kitty under the old pension scheme to Central and State government employees, they were made to contribute for their own pension under the new National Pension System (NPS) administered by the PFRDA, where the corpus would be handed over to private corporates to issue pension out of earnings from market investment of these funds. Associations representing 48.41 lakh central government employees and 1.85 crore State government employees protested on 13 March 2019 demanding scrapping of the NPS and returning to the old scheme. Even 15 years after the switchover from EPS to NPS, the employees are not resigned to accepting the NPS, and at every demonstration and public meeting this demand is raised. The protest would grow louder because, while the minimum pension under the old pension scheme was Rs.9000 per month or 50% of the last drawn salary whichever was higher, under the NPS the minimum pension is Rs.900–2000 per month.
By definition, pension is old-age security. Retirement is supposed to be a rest and relaxation in old age in recognition of the service an employee rendered to the country for 30–40 years and not a drastic income cut. The government is not only flouting the norm of 50% of the last-drawn wages, it doesn’t take even MGNREGA wages as the benchmark for minimum pension. What else can you infer from a shameless government fixing old-age pension under the National Social Assistance Programme (NSAP) at an insulting Rs.200 per month? It is worse than throwing coins at beggars.
At the time of elections, they created a speculation in the media that they were planning to increase the NSAP assistance of old-age pension from Rs.200 to Rs.800 upto the age of 80 and Rs.500 to Rs.1200 above the age of 80. Similar hikes were proposed for the pension schemes for the disabled and widows. In fact, a taskforce appointed by the government itself had recommended doubling of NSAP pensions. But even 4 months after the new government took over, the proposed hike never saw the light of the day.
Mr. Ramalingam Elangovan, Vice-President of DREU, a railway employees’ union affiliated to CITU, points out that in October 2018 40 lakh EPS pensioners were drawing less than a monthly pension of Rs.1500. He says, “At present, 50% of the Central government employees are covered under NPS and we are quite determined to go back to the old pension scheme”.
It seems Modi Government’s pension pangs would only grow and a major showdown is likely. (IPA Service)