Economists call for increasing social security pensions, maternity benefits in letter to FM

Fifty-one economists have signed a letter to Union finance minister Nirmala Sitharaman calling for an increase in social security pensions and the provision of suitable maternity benefits in the upcoming budget 2023-24.

The economists said in their letter that the Union government's NOAPS pension contribution has "stagnated at just Rs 200 per month since 2006." To support the 2.1 billion retirees in the country, it urgently needs to be increased to at least Rs 500 and preferably more, they said.

According to them, the Union government has been inactive on the issue of providing maternity benefits of Rs 6,000 per child to women in India who are not employed in the formal sector since 2013. Pradhan Mantri Matru Vandana Yojana was established for this purpose in 2017, but funding for it in the Union Budget has never been more than a third of what is needed according to NFSA standards.

The economists claimed that they had been following up with letters 20 December 20, 2017, and December 21, 2018, addressed to the late Arun Jaitley, where they tried to flag two priorities for the next Union Budget: an increase in social security pensions, and adequate provision for maternity benefits. Since both proposals were ignored, we are writing again, well in advance of the next Budget, with the same recommendations.

Putting forth their arguments, the economists said, their suggestions if implemented require an additional allocation of Rs. 7,560 Crore or so, based on the current NOAPS coverage (2.1 crore pensioners and raising widow pensions from Rs 300 per month to Rs 500 at the very least would cost another Rs. 1,560 Crore.

The letter signed by Ashwini Deshpande, Jean Drèze, Pulapre Balakrishnan, Sukhadeo Thorat, Vijay Joshi, Farzana Afridi, and Naresh Saxena among others noted that further, in flagrant violation of the Act, PMMVY restricts the benefits to Rs. 5,000 for just one child per woman.

“The Union Budget 2023-24 should provide for the full-fledged implementation of maternity entitlements as per NFSA norms. This requires at least Rs 8,000 crores (assuming a birth rate of 19 per thousand, effective coverage of 90%, and a 60:40 ratio for centre:state contributions). Along with this, the illegal restriction of maternity benefits to one child per woman should be removed,” they said.

The economists finished their letter by stressing that it is also critical to streamlining payment processes so that pensions reach recipients on time every month, i.e. by the 7th of the month, as mandated by the Supreme Court in its November 28, 2001 judgment.