Pension scheme for unorganised workers a non-starter in State

Less than 48,000 labourers of an estimated 1 crore have signed up

CHENNAI, 04/05/2009: Unorganised labourers at work in Chennai. Photo: K.V. Srinivasan 04-05-2009

The Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM), a pension scheme for unorganised workers launched by the Central government, remains a non-starter in the State.

As of July 7, less than 48,000 workers had joined the scheme despite the State having an estimated official overall figure of around 1 crore. R. Geetha, advisor, Unorganised Workes’ Federation – Tamil Nadu, says the actual number is around 2 crore.

The ‘unattractive’ features of the scheme and the presence of better welfare measures for unorganised workers in the State are the main factors behind the poor response, say Labour Department officials and activists. There is also a perception that not much is being done to create awareness about the scheme.

Inaugurated in March, the PM-SYM envisages the payment of a monthly pension of ₹3,000, on attainment of 60 years of age, to workers in the unorganised and informal sectors.

Atal Pension Yojana

Describing the scheme as a variant of the Atal Pension Yojana for the unorganised sector, which was announced in March 2015, Ms. Geetha says that unlike under the old scheme, where subscribers were required to contribute ₹1,000 annually, the beneficiaries of the present scheme have to pay ₹55 to ₹200 every month, depending on their age. There will be a matching contribution from the Central government.

Given that the scheme is open to workers in the age group of 18 to 40 with a monthly income of ₹15,000 or below, Sebastian Crossian, Director, Jesuit Migrant Service (JMS), Loyola College, says there is a feeling among the workers that the scheme does not offer them “higher returns” when they turn 60. Another area of concern pertains to the rule on “uninterrupted payment”. If there is a break in the payment, which is very likely given the nature of the work, the existing rules are “not beneficial” to the workers, Ms. Geetha says. Citing the rules, an official of the Labour Department says that in the event of a worker opting out of the scheme within 10 years, only his or her share of the contribution will be returned, along with the amount accrued at the savings bank interest rate.

If the exit happens after 10 years but before the worker attains 60 years of age, the beneficiary’s share, along with accumulated interest or at the savings bank interest rate, whichever is higher, will be returned. Unless suitable changes are made, the scheme won’t take off, the activists add.