The Union government should increase its share in social security pensions, 51 economists told Finance Minister Nirmala Sitharaman in a letter on Monday.
In their letter, the economists said that the Centre’s contribution to pensions under the National Old Age Pension Scheme has stagnated at Rs 200 per month since 2006. The scheme provides financial assistance to the elderly, widows and persons with disabilities in form of social pensions.
“This is unfair,” the economists said. “It is also a missed opportunity. The central government’s contribution should be immediately raised to Rs 500 [preferably more] at the very least. This requires an additional allocation of Rs 7,560 crores or so, based on the current NOAPS coverage [2.1 crore pensioners].”
The signatories include economists such as Jean Drèze, Abhijeet Singh, Ashwini Deshpande, Dilip Mookherjee, Maitreesh Ghatak, Mausumi Das, Paul Niehaus, Rohini Somanathan and Uday Bhanu Sinha.
In their letter, the economists suggested that pensions to widows should be raised from Rs 300 per month to Rs 500 at least, adding that the increase would cost Rs 1,560 crore to the government.
The economists also raised concerns about maternity benefits.
They said that while the government has to legally pay a maternity benefit of Rs 6,000 per child under the National Food Security Act of 2013, it has not acted on it. The Act exempts those already covered in the formal sector.
“In 2017, a scheme was finally launched for this purpose: the Pradhan Mantri Matru Vandana Yojana,” the letter said. “However, the provision made for it in the Budget never exceeded Rs 2,500 crore – less than one-third of what is required based on NFSA [National Food Security Act] norms.”
The letter also pointed out that the Pradhan Mantri Matru Vandana Yojana restricts the benefits to Rs 5,000 for just one child per woman. This, the letter said, is in violation of the 2013 Act.
“The Union Budget 2023-’24 should provide for the full-fledged implementation of maternity entitlements as per NFSA norms,” it said. The economists said this would require Rs 8,000 crore, assuming that the birth rate is 19 per thousand, the coverage of the Act is 90% and the Centre and state contribution is in 60:40 ratio.
They added: “Along with this, the illegal restriction of maternity benefits to one child per woman should be removed.”
The economists also said they had made the same suggestions in 2017 and 2018 to former finance minister Arun Jaitley, but were ignored.