The BJP’s first full budget made a strong push towards expanding the social security net for vulnerable populations. However, the details of the proposals were met with mixed reactions, with analysts pointing out that the poorest were still excluded.
“A large proportion of India’s population is without insurance of any kind -- health, accidental or life. Worryingly, as our young population ages, it is also going to be pension-less,” Union Finance Minister Arun Jaitley said in his speech. His statement reflects a reality first brought to light by the 2011 Census, which showed that India’s southern States had already achieved replacement levels of fertility, and the country would need to start dealing with a growing proportion of elderly people in its population.
Mr. Jaitley announced three insurance schemes — Pradhan Mantri Suraksha Bima Yojna, which will cover accidental death risk of Rs. 2 lakh for a premium of Rs. 12 per year, Atal Pension Yojana, a contributory pension scheme, and the Pradhan Mantri Jeevan Jyoti Bima Yojana, to provide both natural and accidental death cover of Rs. 2 lakh with a premium of Rs. 330 per year, for the age group 18-50.
For the Atal Pension Yojana, the government will contribute 50 per cent of the beneficiaries’ premium up to Rs. 1,000 per year for five years in new Jan Dhan accounts opened before December 31, 2015.
The budget had additional offers for senior citizens. Mr. Jaitley proposed the creation of a Senior Citizen Welfare Fund which would appropriate unclaimed deposits in the Public Provident Fund and the Employee Provident Fund. This would subsidise the premiums of vulnerable groups. He also proposed a new scheme to provide physical aid and assisted living devices for poor senior citizens.
Nikhil Dey of Mazdoor Kisan Shakti Sangathan and Pension Parishad welcomed the schemes that provided death covers, but criticised the government for failing to enact a comprehensive universal pension scheme. “What has been announced is a contributory pension scheme, but what true social security would be is a non-contributory universal pension scheme,” he said, adding that the poor did not have the money to invest in such schemes.
Moreover, the government has cut allocations to the National Social Assistance Programme, which provides pensions to the elderly, widows and differently abled people, by Rs. 1,000 crore in the new budget.
“That scheme provides just Rs. 200 in pensions, a sum the previous government had promised to raise. What was needed was for this sum to be raised and the scheme to be strengthened,” Mr. Dey said.
Other middle income countries have far wider social security nets; in Brazil, rural workers aged over 60 and all of the poor get a pension equal to the minimum wage without having contributed while they worked.
