Social security and the story of two Budgets

Source– The post is based on the article “Social security and the story of two Budgets” published in The Hindu on 18th February 2023.

Syllabus: GS3- Government schemes and interventions

Relevance: Socio-economic Welfare of vulnerable section

News- In Union Budget 2023-24, the finance minister asserted that since 2014, the central government has ensured a better quality of life, and a life of dignity for all its citizens. But Budget figures help distinguish rhetoric from the truth.

What are the issues with social security provisions provided by the central government?

Budgetary provisions– There have been severe cuts in various social security and welfare schemes such as food security and the MGNREGA in the budget.

Elderly and other social security pensioners are not given enough consideration.

Budget for the NSAP has remained constant, at approximately ₹9,000 crore. It is steadily reducing in real terms. This year, the NSAP saw a reduction of ₹16 crore.

Low amount of pension-Failure to index social sector expenditure to inflation has led to the even greater marginalisation of vulnerable people. India’s cumulative inflation rate from 2007 to 2023 is 193.19%. This means that ₹200 in 2007 would have become ₹586.38 in 2023 if indexed.

Since 2007, social security pensions under the National Social Assistance Programme have remained frozen at a low of ₹200 for the elderly and ₹300 per month for widows and persons with disabilities.

Numbers receiving pensions– For selecting beneficiaries, the central government relies on the obsolete Below Poverty Line lists based on Census 2001.

Additionally, the stringent criteria of providing disability pensions only to those with a disability level of 80% or more, has excluded lakhs of the disabled even within the obsolete BPL category.

What Rajasthan seems to be a better model for social security provisions to vulnerable populations?

Rajasthan announced a landmark Minimum Income Guarantee and Pension law in the recent budget.

It provides 125 days of work through the rural or urban employment guarantee, and a minimum social security pension of ₹1,000 per month, with an automatic increase of 15% per Annum.

Today, Rajasthan provides social security pensions to over 90 lakh people. NSAP covers only a small part of the pension of 10 lakh pensioners.

After this Budget announcement in Rajasthan, the total amount spent on pensions is expected to go up to ₹11,500 crore. It is approximately 30% more than the entire national social security pensions budget under NSAP.

In 2013, the Rajasthan government changed its eligibility criteria to expand the coverage of pensioners by making economically vulnerable women above 55, and men above 58 eligible for old-age pension.

It also permitted widows with adult children to receive a widow pension, and included anyone with more than 40% disability to receive a disability pension.

What is NSAP?

NSAP is a centrally sponsored social security scheme. It provides income security to the elderly, widows, and persons with disabilities from “BPL families”.

In addition to the central contribution, State governments are encouraged to match the amount as the central contribution under the NSAP’s guidelines.

Trends across 36 States indicate that a majority of the States are providing several times the suggested amount.

What is the way forward for the central government and other state governments for social security to vulnerable populations?

Other States, and even the Government of India should follow the example of Rajasthan. They should take the necessary steps to change their existing schemes into an Act that provides more credible entitlements, strengthens accountability.

The Central government must recognise that pension is a right for work done by unorganised sector workers, who are contributing seminally to the GDP and economy all their lives.

The vulnerable working people, senior citizens and the disabled, rights-based entitlements provide a measure of dignified living which should be the objective of any democracy.