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Unorganised Sector | Half-Measures For The Needy

Bihari Yadav, 30, an untrained guard working with a security agency in Patna, is not particularly enthused by the new contributory pension scheme announced in the budget for the unorganised sector. ForgetRs 100, why would I pay a single penny as contribution? If the government wants to give me a pension of Rs 3,000 per month, it should pay from its own funds, he says.

The Pradhan Mantri Shram-Yogi Maandhan offers unorganised sector workers with monthly incomes of up to Rs 15,000 a monthly pension of Rs 3,000 after the age of 60. The scheme is expected to benefit 100 million workers, including street vendors, rickshaw drivers, construction workers, ragpickers and agricultural workers, over the next five years. A worker needs to contribute Rs 55 (if joining at the age of 18) to Rs 100 (if joining at 29) a month while the government will make a matching contribution. The government estimates the total number of unorganised sector workers at 420 million.

Safina Khatoon, 59, a beedi-maker in Bihar’s Nawada district, is eager to enrol. I have spent my life in penury. Getting a pension of Rs 3,000 would be good, but I have no clue if I am eligible at this age, she says, underscoring the need to create awareness.

According to Dhirendra Kumar, investment expert and founder-CEO of mutual fund research house Value Research, the pension scheme is revolutionary. If India has to grow, you can’t ignore those in the unorganised sector. Even if it amounts to putting a tax on people like us, it is worthwhile, he says.

Experts say the mandatory contribution is the government’s way of trying to make unorganised sector workers take ownership of their pension accounts. But the scheme cannot be a substitute for jobs, whose growth depends on economic activity and emphasis on sectors such as manufacturing. n

Source: indiatoday.in

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