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In a letter to Nirmala Sitharaman, Union Finance Minister, 51 senior economists have made strong exception to the manner in which the Government of India is undermining social security pensions and maternity entitlements, pointing towards how both the benefits have been “ignored”.
Writing ahead of the Union budget, they urge the senior minister to increase the old age pension from Rs 200 to Rs 500, and widow pension from Rs 300 to Rs 500. At the same time, they insist, there is a need to not only increase maternity benefit but also remove the "illegal" one child norm for obtaining the entitlement.
1. Social security pensions: The central government’s contribution to old-age pensions under the National Old Age Pension Scheme (NOAPS) scheme has stagnated at just Rs 200 per month since 2006. This is unfair. It is also a missed opportunity: NOAPS is a good scheme (with low leakages and administrative costs) that reaches some of the poorest members of society. The central government’s contribution should be immediately raised to Rs 500 (preferably more) at the very least. This requires an additional allocation of Rs 7,560 crores or so, based on the current NOAPS coverage (2.1 crore pensioners). Similarly, widow pensions should be raised from Rs 300 per month to Rs 500 at the very least. This would cost just another Rs 1,560 crores.
2. Maternity entitlements: Maternity benefits of Rs 6,000 per child are a legal entitlement of all Indian women (except those already covered in the formal sector) under the National Food Security Act 2013. For many years, the central government did not act on this. In 2017, a scheme was finally launched for this purpose: the Pradhan Mantri Matru Vandana Yojana (PMVVY). However, the provision made for it in the Union Budget never exceeded Rs 2,500 crore - less than one third of what is required based on NFSA norms. Further, in flagrant violation of the Act, PMMVY restricts the benefits to Rs 5,000 for just one child per woman. The Union Budget 2023-24 should provide for full-fledged implementation of maternity entitlements as per NFSA norms. This requires at least Rs 8,000 crores (assuming a birth rate of 19 per thousand, effective coverage of 90% and 60:40 ratio for centre:state contributions). Along with this, the illegal restriction of maternity benefits to one child per woman should be removed.
It is also important to streamline payment systems so that pensions reach the recipients on time every month, i.e. by the 7th day of the month as directed by the Supreme Court in its order of 28 Nov 2001.
We urge you to accept these modest recommendations.
Text:
This is a follow-up to our letters of 20 December 2017 and 21 December 2018 (addressed to your predecessor, Shri Arun Jaitley), where we tried to flag two priorities for the next Union Budget: an increase in social security pensions, and adequate provision for maternity benefits. Since both proposals were ignored, we are writing again, well in advance of the next Budget, with the same recommendations. Our argument, much as before, is as follows.1. Social security pensions: The central government’s contribution to old-age pensions under the National Old Age Pension Scheme (NOAPS) scheme has stagnated at just Rs 200 per month since 2006. This is unfair. It is also a missed opportunity: NOAPS is a good scheme (with low leakages and administrative costs) that reaches some of the poorest members of society. The central government’s contribution should be immediately raised to Rs 500 (preferably more) at the very least. This requires an additional allocation of Rs 7,560 crores or so, based on the current NOAPS coverage (2.1 crore pensioners). Similarly, widow pensions should be raised from Rs 300 per month to Rs 500 at the very least. This would cost just another Rs 1,560 crores.
2. Maternity entitlements: Maternity benefits of Rs 6,000 per child are a legal entitlement of all Indian women (except those already covered in the formal sector) under the National Food Security Act 2013. For many years, the central government did not act on this. In 2017, a scheme was finally launched for this purpose: the Pradhan Mantri Matru Vandana Yojana (PMVVY). However, the provision made for it in the Union Budget never exceeded Rs 2,500 crore - less than one third of what is required based on NFSA norms. Further, in flagrant violation of the Act, PMMVY restricts the benefits to Rs 5,000 for just one child per woman. The Union Budget 2023-24 should provide for full-fledged implementation of maternity entitlements as per NFSA norms. This requires at least Rs 8,000 crores (assuming a birth rate of 19 per thousand, effective coverage of 90% and 60:40 ratio for centre:state contributions). Along with this, the illegal restriction of maternity benefits to one child per woman should be removed.
It is also important to streamline payment systems so that pensions reach the recipients on time every month, i.e. by the 7th day of the month as directed by the Supreme Court in its order of 28 Nov 2001.
We urge you to accept these modest recommendations.
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