Highlights:
- Individuals need to make a monthly contribution till the age of 60 to get an assured pension of Rs 3,000 every month
- Out of the total enrolment, 50-60 million workers will be from the construction sector
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The Centre will enrol around 150 million (15 crore) workers over the next three years under its flagship pension scheme Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM), bringing more informal sector workers under the social security net.
Labour Secretary Hiralal Samariya on July 31 said the pension scheme will benefit a large pool of people who earn less, but form a large part of the labour market. The secretary said a sizable portion of beneficiaries will be construction workers.
The National Democratic Alliance (NDA) government is targeting the bottom of the pyramid through various policy interventions, realising that they are a significant political constituency.
Speaking at a function organised by the Federation of Indian Chambers of Commerce and Industry (FICCI), Samariya said the “scheme is doing well” since its announcement six months ago. The government is likely to achieve the 150 million number over the next two to three years. The Labour Secretary said out of the total enrolment, 50-60 million workers will be from the construction sector, reiterating that even agriculture workers and self-employed retailers can be a part of this pension scheme.
The government had announced the scheme in the February 2019 interim budget, promising to provide pension of Rs 3,000 per month. Individuals subscribing to the PM-SYM require to make a monthly contribution till the age of 60 years, to get an assured pension of Rs 3,000 every month.
The monthly contributions varies according to age: An 18-year-old starts out by paying Rs 55 per month, which moves up to Rs 80 at the age of 25, and Rs 105, Rs 150 and Rs 200 for those aged 30, 35 and 40, respectively. A matching amount will be paid by the government into the pension fund.
As per the scheme, if the pensioner dies, the spouse shall be entitled to receive 50 percent of the pension amount as family pension. Besides, if a regular contributor dies before the age of 60, the spouse will be entitled to join and continue the scheme subsequently by payment of regular contribution or exit the scheme as per provisions of exit and withdrawal.
Around eight percent of the labour market are formal sector employees and social security benefits, including provident funds, pensions, etc, are only available to them. Samariya said this makes PM-SYM important as it aims to bring a chunk of informal sector workers under social security provisions.
The secretary’s statement comes a day after the Lok Sabha passed the wage code bill, which seeks to provide minimum wages to all workers. According to official data, at least 3.5 million workers have already enrolled under the scheme till the beginning of July. Both Labour Ministry and the Life Insurance Corporation of India are key stakeholders in rolling out the plan.
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