By Krishika Dinesh Rathod
The government is crafting a ‘universal pension programme’ that will cover everyone, including informal sector workers, says Labour Ministry sources. On these lines, people in the informal sector, like construction workers, domestic helpers, and contract or gig workers, don’t have access to any government-sponsored large savings programmes.
The scheme will be available to all paid workers as well as self-employed persons, though. “The key difference between this new concept and existing schemes, however, is that contributions for the former will be voluntary, and the government will not contribute any fund from their end,” say insiders. Additionally, the core idea is to create a ‘universal pension system,’ which would incorporate a few existing schemes and rationalize the nation’s pension/savings system.
“According to insiders, this would be considered a secure option for any action voluntarily.” The new system, temporarily named ‘New Pension System,’ will not override or engulf the current National Pension Scheme, which itself is a voluntary pension scheme.
“Stakeholder consultation will begin once the proposal document is prepared,” sources say. There are currently some government pension schemes for the unorganised sector, such as the Atal Pension Yojana, which gives a monthly return of Rs 1,000 – Rs 1,500 once the investor is 60 years old, and the Pradhan Mantri Shram Yogi Mandhan Yojana (PM-SYM), which will benefit street vendors, home workers, and workers, among others.
The government seeks to develop an inclusive and streamlined pension system to make financial security accessible to a larger section of the population. This program is especially important for workers in the informal sector, who tend not to have old-age financial cushions.
Experts also believe that a universal pension scheme would foster long-term saving behavior among the citizens. Furthermore, the government can launch online platforms to make enrolment smooth and tracking of contributions easy. Officials point out that the voluntariness of contributions will help ensure flexibility as well as allowing people to make arrangements for retirement.