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Govt to enroll up to 150 million people under PM pension scheme

IBEF:  August 01, 2019

The Union government plans to register around 150 million workers over the next three years under its new leading pension scheme Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM). This scheme is to bring social security to informal sector workers.

According to the labour secretary Hiralal Samariya, this pension scheme will help lot of people who earns less and are part of labour market. This will also benefit the construction workers.

The present government is focusing on the bottom of pyramid by various policy interventions as they are important part of political constituency.

Samariya added that the scheme is doing fine since its launch and is likely to receive 150 million number in coming two to three years. Out of this enrolment, 50-60 million workers will be from construction sector and even agriculture workers and self- employed retailers.

The government had launched the scheme in the February 2019 under interim budget, pledging to provide pension of Rs 3,000 per month. Individuals subscribing to the PM-SYM need to make a monthly contribution till the age of 60 years, to get a guaranteed pension of Rs 3,000 every month.

The monthly contributions vary according to age like an 18-year-old starts out by paying Rs 55 per month and which will gradually move up to Rs 80 at the age of 25, followed up by Rs 105, Rs 150 and Rs 200 for those aged 30, 35 and 40, respectively. The similar amount will be paid by the government into the pension fund.

According to the scheme, if the pensioner dies then the spouse shall be eligible to receive 50 per cent of the pension amount as family pension. Also, if a steady contributor dies before the age of 60, the spouse will be permitted to connect and continue the scheme by payment of regular contribution or exit the scheme as per requirements of exit and withdrawal.

About 8 per cent of the labour market is composed of formal sector employees and social security benefits, including provident funds, pensions, etc., are only available to them. According to Samariya, this makes PM-SYM more essential as its target is to bring a chunk of informal sector workers under social security provisions.

This comes after the day when wage code bill was passed in Lok Sabha, which aims to provide minimum wages to all workers. According to the data available, at least 3.5 million workers have by now registered under the scheme till the beginning of July. The labour ministry and the Life Insurance Corp. of India are major stake holders in this plan.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.