The IndianGovernmentis developing a universal pension scheme to help the who have had traditional job-based plans. The scheme is voluntary and contributory and aims to provide security to all.

“Theschemewill not be tied to employment and hence will be open for everyone to contribute and earn a pension,”said a government senior to ET, explaining the scheme’s reach from unorganized workers to trades and individuals who are self-employed, to the extent that anyone aged 18 will be allowed to receive a pension after the 60s.

The aim

The scheme aims to consolidate existing pension plans under a single framework, making it easier for citizens to access benefits. This includes the National Pension Scheme for Traders and the Self-Employed (NPS-Traders) and the Pradhan Mantri Shram Yogi Maandhan Scheme. These programs offer subscribers a monthly pension of 3,000, based on contributions that range from 55 to 200, with the government providing matching funds, The Atal Pension Yojana is also to be incorporated under the pension program which is currently under PFRDA.

The scheme solely focuses on providing benefits to workers who are in the unorganized sectors, traders, and self-employers who would benefit from the scheme in their 60s.

The Need

Developed countries such as Canada, the US, Russia, and China provide comprehensive systems of social insurance which constitutes social security, pensions, health care, and unemployment benefits

The population of India is predicted to reach 227 million by 2036, making up 15% of the total population. By 2050, this number is expected to increase to approximately 347 million, accounting for nearly 20% of the population. India’s social security framework for this segment of the population is primarily based on a provident fund system, old age pensions, and health insurance, which are only provided to those below the poverty line.

In these circumstances, India requires a Universal Pension scheme that could benefit all.

In the works

The discussion surrounding the development ofthe schemebegan at the Labour and Employment Ministry, the fundamental structure of the scheme is under development by the Employees Provident Fund organization.

The proposal suggests using the funds collected through the Building and Other Construction Workers Act to provide pensions for workers in the construction industry. However, the ministry has not yet discussed the plans with stakeholders to finalize the details of the Universal Pension Scheme.

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