Rs 1,000 a year pension aid approved for informal sector workers
|
COMMENTS 
The government has approved a Rs 1,000 per annum pension for unorganised sector workers to encourage the savings habit among this population of over 300 million
The Indian Cabinet has approved implementation of the Swavalamban scheme to cover workers in the unorganised sector and to provide old age security to all sections of society. The proposal includes funding support to the tune of Rs 1,000 crore over a period of four years, that is, up to 2013-14, as co-contribution to subscribers of the New Pension System (NPS) covered by the Swavalamban initiative.
The scheme will encourage people from the unorganised sector to voluntarily save for their old age. Funding may be required to be enhanced should subscriber enrolment exceed the expected number.
The NPS is the first major national scheme that aims to bring old age security to all sections of society, especially vulnerable sections. A greater level of NPS enrolment from the informal sector will ensure old age income security for subscribers in their post-retirement years and, therefore, decrease the burden of government on social security in the future.
Under the Swavalamban scheme, 10 lakh subscribers in the four years beginning 2010-11 will be covered, taking the total number of subscribers to 40 lakh. The government will contribute Rs 1,000 per year to every NPS account over four years, starting this fiscal.
The assistance is subject to the beneficiary contributing any amount between Rs 1,000 and Rs 12,000 per annum, according to an official statement. Initially, 10 lakh workers will be covered every year over the four years ending 2013-14.
The government has also provided for Rs 100 crore to be spent in 2010-11, and in the subsequent three years, towards creation of public awareness about the NPS and enlistment of subscribers under the scheme.
Source: ANI, August 9, 2010
Press Trust of India, August 9, 2010
The Economic Times, August 9, 2010