Wooing unorganised workers, in his first-ever Budget speech Finance Minister Piyush Goyal on Friday announced a mega launch of Pradhan Mantri Shram Yogi Mandhan or PMSYM scheme to provide them an assured monthly pension of Rs 3,000 after 60 years of age.
The new pension scheme will help millions working in India’s bustling unorganised sector who continue to remain outside any social security net. The scheme will cover all those unorganised sector workers like autorikshaw driver, plumbers, domestic helps and others whose income is up to Rs 15,000 per month.
The move of the government comes at a time when the BJP-led Modi government is facing criticism from Opposition over apathetic attitudes towards unorganised labourers in the country. With the scheme, the government is expecting that they may attract this section of people in the upcoming 2019 Lok Sabha polls to be held in the month of April-May this year.
With the launch of the scheme, the government said that it would attract matching contribution of Rs 100 per month from government as well as from workers. A monthly pension of Rs 3,000 to unorganised workers that will possibly include tens of thousands of migrant labourers and the household help.
Besides the pension scheme for unorganised workers, Goyal also announced hiking of tax-free gratuity to Rs 30 lakh from existing Rs 20 lakh for employees having service of more than five years. The government had doubled the tax-free gratuity to Rs 20 lakh in March last year. Hiking gratuity limit will enable employers to pay higher tax-free gratuity to their employees who have worked for them for more five years.
“We are launching Pradhan Mantri Shram Yogi Mandhan today. The scheme will provide assured monthly pension of Rs 3,000, with contribution of 100 rupees per month, for workers in unorganised sector after 60 years of age,” Goyal said while presenting the interim Budget for 2019-20.
As per the National Sample Survey Office (NSSO) study, it is, however, estimated that there were 474.1 million employed people in 2011-12. More than 8 out of ten of these or 82.7 per cent (or say 391.4 million persons) were working in the unorganised sector, employed without social security benefits, job contracts or even the guarantee of getting paid on time.
While the details were not announced, the scheme is likely to be enforced through the Unorganised Workers’ Social Security Act, 2008, (UWSS Act) that gives a legal framework for providing social security benefits to workers in the unorganised sector. The Act provides for the registration and issuance of identity cards to unorganised workers.
In a recent pre-budget meeting, previous Finance Minister Arun Jaitley had also told trade union representatives during the weekend one of the major priorities of the government is to ensure social security benefits for those working in the unorganised sector.
As far as the mega PMSYM scheme is concerned, Goyal also said, “The scheme will benefit 10 crore workers in unorganised sector, may become the world’s biggest pension scheme for unorganised sector in five years.
“There are around 42 crore unorganised sector workers, which contribute toward the growth of national economy. The minister also informed the Lok Sabha that the government is providing Rs 500 crore initially for the scheme in the Budget,” he added.