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Rs 1,000 pension aid to informal sector workers

The government today approved a Rs 1,000 per annum pension assistance to unorganised sector workers to inculcate the habit of savings among this population of over 300 million.



New Delhi: The government today approved a Rs
1,000 per annum pension assistance to unorganised sector
workers to inculcate the habit of savings among this
population of over 300 million.

Under the `Swavalamban Scheme`, the government would
contribute Rs 1,000 per year to every New Pension System
account of 40 lakh such workers over four years starting this
fiscal.

The assistance is subject to the beneficiary contributing
any amount between Rs 1,000 to Rs 12,000 per annum, according
to an official statement.

Initially 10 lakh workers would be covered each year over
the four years ending 2014-15.

"A higher level of New Pension System (NPS) enrollments
from the informal sector will ensure old age income security
for such subscribers in their post-retirement phase and,
therefore, decrease the burden of the government on social
security in the future," said the statement issued after the
Cabinet meeting here.

Under the scheme, the government would provide Rs 1,000
crore over a period of four years to 2013-14.

Initially, the government had launched the NPS for
central government employees joining service from January 1,
2004, but from May 1 last year it was extended to all
citizens. However, it received a lukewarm response and only
around 8,000 subscribers joined the scheme in 14 months.

The government would also provide about Rs 100 crore to
the Pension Fund Regulatory and Development Authority (PFRDA)
for promotional and developmental activities for enrollment
and contribution collection under the `Swavalamban` scheme.

Finance Minister Pranab Mukherjee in his Budget speech
this year had announced to launch the `Swavalamban` scheme in
the current fiscal.

A large number of India`s 300 million informal sector
workers are highly vulnerable to old age poverty because they
have traditionally been excluded from formal pension
provisions.

The old age income security system in the country covers
only the organised sector, comprising the public sector
(including the civil service) and the establishments covered
under the Employees` Provident Fund Organisation (EPFO) or
other statutory Funds.

PTI

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