Monday, April 5, 2010

PM to open pension scheme in Rae Bareili



"Swavalamban"  a pro-unorganised labour

By R Rajagopalan

NEW DELHI: The Government is all set to roll out yet another social
security plan "Swavalamban"  that promises to provide a lifelong pension of minimum
Rs 1000 a month to the unorganised sector workers.

 The pension can be still higher if the worker is able 
to voluntarily save more through higher contribution.

The scheme is planned to be launched by Finance Minister Pranab
Mukherjee in the first week of July from Rai Bareli, the Lok Sabha
constituency of Congress President Sonia Gandhi.

A pet scheme of Pranab Mukherjee Finance Minister.Most of the
themes are now put on paper for action. To implement it the
Secretary Banking R Gopalan has begun to interact with the
heads of Life Insurance Corporation, Insurance Regulatory Authority
and Pension Fund  Regulatory Authority Fund.

By middle of May 2010 the scheme will given a final shape.
Talking to this correspondent R Gopalan detailed the proposal.

The scheme will be available for only three years and its continuation
further will depend on the response it gets from the unorganised
sector, sources in the Finance Ministry said. The government will
stand guarantee to pay the pension as the scheme is to be run by the
government's own Life Insurance Corporation of India (LIC) under the
supervision of the Pension Fund Regulatory and Development Authority.

A worker has to contribute Rs 100 a month for 20 years to become
eligible for drawing the pension until death on completion of 60 years
of age. The Centre will put Rs 1000 a year for the first three years
in each such pension account opened as part of the government's
commitment to provide social security to the vulnerable sections of
the society.

Mukherjee has provided 1000 million rupees in the 2010-11 union budget
that will be sufficient to benefit one million workers. While
presenting the budget in the Lok Sabha on February 26, he had appealed
to the state governments to contribute a similar amount to make the
scheme more robust.

"Swavalamban" (self-help) is the name Mukherjee gave to this
initiative that he hopes to make as popular as the Mahatma Gandhi
National Rural Employment Guarantee Scheme. Sources said this name is
most appropriate as the scheme is basically to encourage the people
from the unorganised sector to voluntarily save for their retirement.

Initially the Finance Secretary Ashok Chawla and Expenditure Secretary
Sushma Nath were cautious about the Swavalamban. But Pranab Mukherjee
over ruled their apprehensions and directed the Fianancial Services division
to proceed with "double speed"

Though he does not expect an unorganised worker be able to pay more
than Rs 100 a month to enjoy the pension benefits that the government
employees enjoy, Mukherjee has set the minimum limit of Rs 1000 a year
and the maximum limit of Rs 12,000 as contribution to the scheme.

Sources said it is the same New Pension Scheme (NPS) that was thrown
open to all citizens of India on May 1 last year in the age group of
18 to 55 years who are not part of any scheme for economic security
after retirement from work.

They said Mukherjee wanted it to become more attractive to those in
the unorganised sector by offering the government's contribution of Rs
1000 per annum in each such account and asking the state government to
chip in identical sum to provide social security to the downtrodden
having no resources to fall back in the old age.

Realising that the scheme proved a non-starter for the unorganised
labour in its first year, Mukherjee spoke to the Prime Minister if the
government can make it popular by contributing from its own side in
any account so opened, sources said. Only 3,784 from the unorganised
sector had become the subscribers under the scheme until February 19.

Financial Services (previously Banking Services) Secretary R Gopalan
is coordinating with the Insurance Regulatory and Development
Authority (IRDA), Pension Fund Regulatory and Development Authority
and Life Insurance Corporation (LIC) of India to put the scheme into
operation for the unorganised sector.

He has already written to IRDA chairman J Hari Narayanan to give
clearance to the scheme at the earliest. Gopalan says there are 14
lakh LIC agents in India and the government plans to give them
incentive to attract the unorganised workers to subscribe to the
"Swavalamban" scheme. If each agent is able to enrol at least three or
four workers, there will be not less than five million subscribers.

Though the government has set the target of only one million
subscribers from the unorganised sector in 2010-11 by providing Rs
1000 million in the budget as its own contribution to such accounts,
Gopalan says finding funds to contribute to more people joining the
scheme will face no difficulty.

This pension scheme is the second major initiative of the UPA
government towards the unorganised sector workers after its
contribution of Rs 10,000 million in 2008 in the unorganised sector
workers social security fund which will help support schemes for the
self-help workers like weavers, toddy tappers, rickshaw-pullers and
bidi workers. The construction labourers who were left out in the
first scheme will be encouraged to join the "Swavalamban" pension
scheme, sources added.



BK Chowla, said...

Time will tell as to how successful this scheme becomes.Such political schemes normally die a natural death.

adin said...

If you want to have 'information' regarding the procedure for settlement of the contribution you made to the 'new pension scheme' you have to ask for it from the PIO of the Ministry concerned where you were employed. The NPS talks about the investment scheme at the present date and for annuity we have to buy from the insurance schemes available at that time of sixty years.
pension scheme

Lump Sum Annuity said...

lump sum annuityWell working after retirements is an another option if one really wants to earn money or to increase savings.but it also has some pros and cons.working after retirements totally depends upon individual choice or his/her financial status/position.