INDIA: Life-long Pension Scheme Proposed for Poor Seniors

NEW DELHI (The Economic Times), August 4, 2007: There is good news for senior citizens. The government plans to provide them life-long financial support under a monthly pension scheme. “The government is considering a proposal to provide Rs 400 per month to all senior citizens over 65 falling in below poverty line (BPL) category,” an official said. Currently, the old age pension scheme covers only destitutes. The proposed scheme would be an extension of the proposed social security scheme for the unorganised sector workers. A legislation to this effect has already been finalised by the government. “The exiting old age pension scheme only provides monetary support to destitute. But this classification is very vague. It has now been proposed to extend the scheme all persons above 65 years in the BPL families,” he said. Once implemented, the scheme would benefit 1.57 crore individuals. The Centre is expected to fork out Rs 3,768 crore annually to run the scheme under which Centre would provide support of Rs 200 per month while a matching contribution would have to be made by the states. Only 11 states are presently giving their contribution. The source said that under social security for unorganised workers, another scheme may be launched that would provide windows in BPL families a higher pension of Rs 600 per month and disabled in category a pension of Rs 400 per month. The schemes would run on 75:25 support from Centre and the states with former’s share working to about Rs 7,400 crore annually while state would have to provide Rs 2,500 crore annually. The government is also planning to provide maternity benefits to women of BPL families to the extent of Rs 3000. This may be offered in instalments of Rs 500, three months before and after the delivery. The rejig in the social security schemes may also extend the coverage of universal health insurance scheme (UHIS) for BPL families to all National Rural Employment Guarantee (NREG) scheme beneficiaries. Under this, a token amount of Rs 17.50 would be deducted from wages of Rs 1,120 of individuals as a portion of the premium. The centre and the state would provide the remaining premium. Besides, the finance ministry is finalising the Aam Admi Bima Yojana announced in this year’s budget. The scheme may provide a coverage of Rs 30,000 for natural death of an individual and Rs 75,000 for accidental death. By Subash Narayan Times News Service Copyright © 2007 Times Internet Limited.