Pension hope for DeMo-hit informal sector

Reaching out to the demonetisation-hit informal sector, Finance Minister Piyush Goyal on Friday announced 'Rs 3,000-a-month' contributory pension scheme for India's unorganised workers.

The scheme, named 'Pradhan Mantri Shram-Yogi Maandhan Yojana', is aimed at people with a monthly income of Rs 15,000. The pension will be allotted to them after they cross 60 years of age.

Those who enter the scheme at 18 years of age will have to pay a monthly premium of Rs 55 while those who enter at 29 will have to pay Rs 100 per month till they reach 60. The government will contribute a matching share in the pension account of workers.

"It is expected that at least 10 crore labourers and workers in the unorganised sector will avail the benefit of 'Pradhan Mantri Shram-Yogi Maandhan' within the next five years making it one of the largest pension schemes in the world," Goyal said presenting the Interim Budget.

"A sum of Rs 500 crore has been allocated for the scheme. Additional funds will be provided as needed," the minister said, adding that the scheme will be implemented from the current year.

"Half of India's GDP comes from the sweat and toil of 42 crore workers in the unorganised sector working as street vendors, rickshaw pullers, construction workers... and in numerous other similar occupations. Domestic workers are also engaged in big numbers. We must provide them comprehensive social security coverage for their old age," Goyal said.

The Modi government has been facing Opposition fire on the controversial decision to demonetise high-value currency, saying that it hit the informal economy hard leaving scores of people jobless.

The government has never admitted demonetisation as a misadventure but appears to be taking steps to undo some of its effects.