Raise social security budget, Jaitley told 

Raise social security budget, Jaitley told 

Context

Sixty of India’s leading development economists wrote to Finance Minister Arun Jaitley on Wednesday asking for a big increase in the budget allocation for social security pensions and maternity entitlements.

Economists for higher widow pension

Sixty of India’s leading development economists wrote to Finance Minister Arun Jaitley on Wednesday asking for a big increase in the budget allocation for social security pensions and maternity entitlements.

‘Measly sum’

The Central Government’s contribution to old-age pensions under the National Old Age Pension Scheme (NOAPS) scheme has remained at a measly ₹200 per month since 2006

A missed opportunity

NOAPS is a good scheme (with low leakages and administrative costs) that reaches some of the poorest members of society

Suggestions

• The economists, who included Jean Dreze, Dilip Abreu, and Dilip Mookherjee, said that the Central Government’s contribution should be immediately raised to at least ₹500, which would require an additional allocation of about ₹8,640 crore, based on the current NOAPS coverage of 2.4 crore pensioners.
• Similarly, widow pensions should be raised from ₹300 per month to ₹500 at the very least,” they said. “This would cost just another ₹1,680 crore.”
• “Maternity benefits of ₹6,000 per child are a legal entitlement of all Indian women (except those already covered in the formal sector) under the National Food Security Act 2013,” the letter added.
• For more than three years, the central government did virtually nothing about this. On December 31, 2016, Prime Minister Narendra Modi finally announced that maternity benefits would be provided very soon. One year later, however,
  • The new scheme framed for this purpose (Pradhan Mantri Matru Vandana Yojana) is yet to be operationalised,
  • The provision made for it in the Union Budget 2017-18 (₹2,700 crore) is barely one third of what is required based on NFSA norms; and
  • In flagrant violation of the Act, PMMVY restricts the benefits to ₹5,000 for just one child per woman.
• The economists asked for the Union Budget of 2018-19 to provide for a full-fledged implementation of the maternity entitlements as per the National Food Security Act, which would require at least ₹8,000 crore, based on a 60:40 ratio for Centre and state contributions.

“Along with this, it is very important to streamline payment systems so that pensions and maternity benefits reach the recipients on time every month, e.g. by the 7th day of the month as directed by the Supreme Court in its order of November 28, 2001,” the letter said.