Govt likely to go for pension universalization-Elizabeth Roche and Kirthi V Rao

-Live Mint

Move may help the Congress renew its appeal to a traditional constituency; activists raise objections

In yet another move that the ruling Congress Party hopes will help renew its appeal to a traditional constituency, the ministry of rural development has indicated it is likely to accept the recommendations of a panel that has suggested the universalization of pensions.

The task force headed by Planning Commission member Mihir Shah was set up in October to undertake a comprehensive review of the National Social Assistance Programme (NSAP) dealing with various pension programmes of the government.

 

The proposals are expected to benefit about 80 million people by 2017 and cost the exchequer `1,31,626 crore for 2012-17. The government has earmarked `9,541 crore for NSAP in the 2013-14 budget.

However, economists and activists were unimpressed.

At a meeting on Monday under the banner of Pension Parishad led by activists Aruna Roy and Baba Adhav, they said the phased universalization approach recommended by the panel showed the government was not serious about mobilizing resources for what they called an “urgent demand”. Roy is a member of the National Advisory Council headed by Congress president Sonia Gandhi.

“What we are proposing is a universalization after exclusion” not based on cut-offs currently stipulated by the poverty line, Shah told reporters after handing over the recommendations to rural development minister Jairam Ramesh.

 

“We will be gradually moving in that direction of universalization of pensions (over the 12th plan period, i.e. in 2012-17) due to financial constraints,” Shah said, adding that the criteria evolved for eligibility for coverage under the National Food Security Act will be adopted for pensions as well.

“We want complete consonance between what is decided for the National Food Security Act and National Social Assistance Programme.” Both will be based on the Socio-Economic Caste Census that is being conducted by the rural development ministry and the Census Commission of India and is expected to be completed soon.

The recommendations to be implemented in the first phase or 2013-14 include relaxing the age criterion for widows to receive pension from 40 years to 18 “because young widows also face very serious problems. And we want to extend the coverage to single, divorced, separated and abandoned women also...because the government is deeply committed to the empowerment of women. I think this would be a very strong step in that direction”, Shah said.

In the case of old age pensions, the panel suggested it be indexed to inflation.

The Shah panel has also called for providing assistance to persons with 40% disability rather than the presently stipulated 80%. Explaining the rationale for this recommendation, Shah said, “There is an internationally accepted definition of 40% disability that is accepted in all such cases.”

Rural development minister Ramesh, in his remarks, said he was in “total agreement with the recommendations” and would put it up to the cabinet for implementation.

Shah said the goal should be to roll out the scheme through the direct benefit transfer scheme based on the Aadhaar or unique identity number.

 

“We should not face a situation where people are told because you don’t have an Aaadhaar number you cannot draw your pensions,” Shah said.

 

Ramesh described the recommendations as timely given that protesters from different parts of India had gathered in New Delhi and were on a hunger strike to demand the universalization of pension benefits. Some economists and activists at the meeting organized under the Pension Parishad campaign expressed their opposition.

 

The task force is asking old people to wait for three years for universal inclusion and indexing the meagre sum of `300 to inflation, said Aruna Roy. “We are going to make this a political issue,” said right to information activist Nikhil Dey.

While some of the demands of the Pension Parishad, such as the dropping of the poverty line criterion for determining pension beneficiaries and linking pension to inflation as with government servants, have been included in the panel’s recommendations, Ramesh said that these would be implemented from 2014 onwards.

 

Ramesh also backed Shah’s recommendation that the NSAP be converted into a centrally sponsored scheme from its current status as additional central assistance programme. The conversion would help reduce the procedural delays in the transfer of funds from the central government to the beneficiary through the states, Ramesh said.

 

However, Subrat Das, budget analyst at Delhi-based think tank Centre for Budget and Governance Accountability, said that the experience with other centrally sponsored schemes showed delays and increased spending in the last quarter of the year and went against the demand of the states to be given more flexibility in the federal flow of funds.

The panel’s suggestions come within days of the federal budget announcing the creation of a women’s bank.

“The government seems to be preparing the ground to say that women matter. They are carefully nurturing that segment” of potential voters, said N. Bhaskara Rao, who heads the Centre for Media Studies think tank. “These schemes will definitely be talking points for the government in the run-up to the 2014 elections.”