Pension panel member rejects Rs 300 pension suggestion for the aged

Says many of the suggestions irrational and unacceptable, favours pension equalling ten days' minimum wage

The taskforce on pensions which submitted its recommendations this week has now a dissenting voice.

A member of the taskforce, Harsh Mandar, has issued a note to the panel's report rejecting many of the suggestions that have been submitted to the Government as irrational and unacceptable.

The panel has asked for increasing pensions to Rs 300 for aged, to bring it on par with pension for widows and disabled. Mandar in his note said that he was in favour of a pension equalling ten days' minimum wage, which would be Rs 1,320.

Mandar's said the amount of pension and family benefit proposed by the committee  was too low and "fixed without any rational basis."  

He suggested two alternate methods viz a monthly pension amount to equal at least ten days’ minimum wage (Since the average minimum wage in the country is about Rs 4,000 per month, the monthly pension amount calculated using this logic would be Rs 1,320 per person). The second method involves taking current value of the original pension amount to be calculated by taking into account inflation during the time period in between. 

People covered under the widows pension scheme and disability pension scheme should also be entitled to the same pension amount (and double in case of severe/multiple disabilities) as recommended for the Old age pension scheme run by the rural Development Ministry, he said in a note.

He pointed out that similar to the calculation of pension amounts, there are two methods of calculating the National Family Benefit Scheme (NFBS) amount, which gives life insurance to the unorganised sector workers.

It provides either six months minimum wages or current value of the original amount. Since NFBS is intended to provide immediate assistance upon the death of a breadwinner of the family, an amount equivalent to at least one person’s minimum wages for a period of six months is considered appropriate. Using the current national average of the minimum wage (Rs 4,000 per month) the amount of cash assistance under this scheme should be Rs 24,000. And the current value (as of March 2012) of the original assistance amount of Rs 10,000 in 1995 would be Rs 29,544 (using the CPI - Industrial Workers Index) and Rs 26,083 (using the CPI – Rural Labourers Index).

He further said that a person who has multiple disadvantages, such as a single woman also having a disability, or being aged and having a disability, should receive at least double the pension amount given to a person with only one of these disadvantages, with a cap on twice the pension amount.

He also begged to differ with the taskforce headed by Planning Commission member Mihir Shah on the matter of coverage of the pension scheme.

"Reliance on BPL targeting should be given up immediately, and except only those excluded by objective criteria by the SECC, there should be universal coverage of all old persons, single women and disabled people with pensions, and all non-excluded households with family benefit," he said.

The report accepts the unreliability of the BPL criteria implicitly, and provides that this should be replaced by select exclusion criteria, and does say that ‘NSAP should gradually move towards universal coverage, excluding families so identified by the Socio-Economic and Caste Census (SECC) data,' said Mandar.

Universal coverage by the end of the 12th Plan including all those beneficiaries who are eligible for the proposed National Food Security Act, in both rural and urban areas, is the ultimate objective of the report also, he added.

The other members of the taskforce on pensions were Gayathri Kalia, KP Kannan, Sandeep Dash, Vijaya Srivastava, K Raju and SM Vijayanand.