Govt should expand coverage of old-age pension, hike amount: activists

Suggest 0.8% wealth tax on the most affluent, seek minimum pension of Rs 2,500 a month

India, which spends just 0.04 per cent of its annual GDP on old-age pension for the BPL (below poverty line) sector, should enlarge its coverage along with the amount paid as pension to make any meaningful impact, civil society activists said in New Delhi on Friday.

Under the flagship Indira Gandhi National Social Assistance Programme (IGNOAPS), the Central government  gives a monthly pension of Rs 200 for those in the 60-79 age group and Rs 500 for those 80 and above, which is meagre considering the rise in inflation, they state.

The pension is mainly given to BPL households.

Though several state governments have topped up the Centre’s contribution with their own and also expanded coverage, it is nowhere near the what is required, the activists say.

“In India, around 16 million people get social security pension from the government, but the need is to give pension to around 80 million people,” said Mathew Cherian, CEO, Helpage India.

He said even China, South Africa, Nepal, Bolivia and Botswana have a better pension scheme than India's, both in terms of number of people covered and pension amount.

The activists demanded old age pension be universalized and monthly entitlements be increased to Rs 2,500, or half the minimum wage.

“Successive governments have contributed a pittance to pensions and if the government levies a mere 0.8 per cent wealth tax on the top 1 per cent of wealthy households, it would be enough to fund a higher coverage,” said leading left economist Prabhat Patnaik.

In India, states like Haryana, Rajasthan and Kerala provide a coverage under old-age pension higher than the national average and a higher amount as well. But, no state provides a minimum pension of Rs 2,500 a month.