PM Modi’s pension scheme to bleed the poor

The season of sops is here. With Lok Sabha elections in mind, PM Narendra Modi is all set to announce during his Ahmedabad rally on Tuesday, March 5, that almost 11 lakh persons have joined the Pradhan Mantri Shram Yogi Maan-dhan. Interim Finance Minister Piyush Goyal had first announced this pension scheme during his Budget speech. In the Capital, programmes will be held at Nand Nagri and Mayapuri to announce the schemes.

However, the scheme has a lock-in period till a beneficiary turns 60. And if he or she dies, only the spouse will get 50 per cent of the amount. Children cannot be beneficiaries under this scheme.

Instead of expanding social security pensions, the government, through the labour ministry, has sent out notifications instructing officials to mobilise workers in the unorganised sector to join this contributory scheme. It is aimed at poor MGNREGA workers, Self-Help Group women, cobblers, rag pickers, domestic workers, washermen, rickshaw pullers and landless labourers, whose monthly income is less than Rs 15,000 and who belong to the age group of between 18 and 40 years.

The government will make a matching contribution in accordance with the subscriber’s payment. An 18 year old, who joins the scheme, will have to pay Rs 55 and the government will make an equal contribution, making the amount Rs 110. A 29-year-old will have to contribute Rs 100 and a 40-year-old Rs 200.

All the labour ministry officials have been roped in all the states to ensure maximum enrolment. In the Capital, employees have been going around in markets, tea-stalls, auto junctions to ensure they enrol in the scheme. The Central government employees had their leaves and offs cancelled to ensure PM Modi could announce a substantial number of contributors to the scheme.

Here lies the catch. This scheme can only be availed by those who own an Aadhaar card, a mobile phone and a savings bank account. And that’s not all. This scheme has been designed to benefit private players. The contributors will have to leave their amount in the savings bank account until the age of 60 to ensure they will get a monthly pension of Rs 3,000 after they are 60. In simple terms, if a 40-year-old woman joins this scheme, over 20 years, she will contribute Rs 48,000 and the govt an equal amount, but this amount cannot be withdrawn. In case, the contributor drops out before she is 60, she would only get her contribution back along with the accumulated interest.

In this scheme, only a spouse can be a family beneficiary and if the primary contributor dies, the spouse will get only 50 per cent of the amount. Children are not beneficiaries and in case a person, who is single, dies, her money will remain with the fund as she cannot have any other beneficiary.

The enrolment will be carried out by all the Common Services Centres, which are private entities. This means that your Aadhaar details and bank details will be with private entities, contrary to the Supreme Court ruling. These centres are points from where personal data leakages have occurred in the past.

Given the shortage of time to enrol subscribers, all LIC, EPFO/ESIC and labour offices of Central and state governments were asked to set up a “Facilitation Desk” to ‘guide’ the unorganised workers to enrol in this scheme, said sources.

The Modi-led BJP government announced this Yojana after systematically reducing the budgetary allocation to Central social security schemes. In 2018-19, the government had allocated Rs 9,975 crore to the National Social Assistance Programme, but in 2019-2020, they have allocated Rs 9,200 crore; for old age pension and widow pension, the allocation was respectively Rs 6,565 crore and Rs 2,256 crore in 2018-2019, but in the 2019-2020 budget, both were reduced to Rs 6,259 crore and Rs 1,939 crore respectivel