What is Universal Pension Scheme in India? Govt working on ‘Universal Pension Scheme for all’
The Universal Pension Scheme in India is a proposed initiative by the government to provide a comprehensive pension system for all citizens, including those in the unorganized sector, self-employed individuals, and salaried employees. The scheme aims to streamline existing pension schemes under one framework, making them more accessible and beneficial.
Here are key aspects of the Universal Pension Scheme:
Voluntary Contributions: The scheme will allow individuals to make voluntary contributions, which will not be linked to employment status.
Coverage: It will cover a wide range of people, including unorganized sector workers, traders, self-employed individuals, and other citizens aged 18 and above.
Integration of Existing Schemes: The scheme is likely to integrate existing pension plans such as the Pradhan Mantri Shram Yogi Maandhan (PM-SYM), National Pension Scheme for Traders and Self-Employed (NPS-Traders), and possibly the Atal Pension Yojana.
Benefits: It aims to provide a structured pension system, ensuring financial security for retirees.
Purpose: The primary goal is to extend social security beyond traditional employment, providing a more inclusive and sustainable pension system for India’s workforce.
Development: The Ministry of Labour and Employment, along with the Employees’ Provident Fund Organisation (EPFO), is working on the framework. Stakeholder consultations will follow once the proposal is finalized.
Need for the Scheme: With India’s senior citizen population expected to rise significantly, a comprehensive social security system like the Universal Pension Scheme is crucial for ensuring financial stability for the elderly.
The Universal Pension Scheme is a proposed initiative by the Government of India to ensure that every citizen, especially those from economically weaker sections, can have access to financial security in their old age. The idea is to provide a basic pension to all, regardless of their employment status, income, or social background. The goal is to address the challenge of an aging population and provide a safety net for people who don’t have access to formal pension schemes.
Currently, various pension schemes exist in India, but they are often targeted at specific groups like government employees, the formal sector, and workers in organized sectors. The Universal Pension Scheme would aim to extend this to everyone, especially those in the informal sector who are not covered by existing pension plans.
Key Features of the Universal Pension Scheme:
Inclusivity: The scheme will aim to cover the entire population, including those in the unorganized sector.
Basic Pension: A fixed amount will be given monthly to individuals once they reach a certain age (usually above 60 years).
Affordable Premium: The contributions required for the pension will be low and affordable, with the government possibly subsidizing part of the premium, especially for low-income groups.
Social Security: It aims to provide a financial safety net for elderly people who may not have the means to support themselves after retirement.
Self-contributory Option: People could have the option to contribute to the scheme during their working years, which would then ensure a pension once they retire.
Government’s Work on the Scheme:
The Indian government has been discussing this idea for some time, and it has been part of the broader agenda of social security reforms. Pension reforms in India have been under consideration to ensure that more people, especially in rural and informal sectors, get a steady income during their retirement years. In the 2023-24 Budget, there was a mention of the Universal Pension Scheme as the government expressed its intention to create a framework for this initiative.
Currently, some government schemes like the Pradhan Mantri Shram Yogi Maan-Dhan (PM-SYM) are a step in this direction, which offers a pension to workers in the unorganized sector. However, the idea of a universal pension scheme would go beyond these specific programs and aim to include a broader base of the population.
Challenges:
Funding: One of the biggest challenges for the government will be financing such a scheme, as it would require substantial resources.
Administrative Costs: Managing a scheme for the entire population could incur high administrative costs.
Ensuring Sustainability: Ensuring the long-term sustainability of the pension fund would require careful planning and investment strategies.
The Universal Pension Scheme, if implemented, could be a major step towards social welfare and poverty alleviation in the country, especially for older citizens who are vulnerable without a steady source of income post-retirement.
Based on the information available, the “Universal Pension Scheme” in India refers to ongoing efforts by the government to create a more comprehensive and accessible pension system for all citizens. Here’s a breakdown of key aspects:
Goal:
The primary objective is to provide social security, particularly for those in the unorganized sector, self-employed individuals, and traders.
It aims to expand pension coverage beyond existing schemes.
Key Features:
Voluntary and Contributory: The scheme is designed to be voluntary, allowing individuals to choose to participate. Contributions will be made by the individuals themselves.
Open to All: The intention is to make the scheme accessible to all Indian citizens, regardless of their employment status.
Integration of Existing Schemes: There are plans to integrate existing pension schemes, such as the Pradhan Mantri Shram Yogi Maandhan (PM-SYM) and others, to streamline the process.
Focus on the Unorganized Sector: A significant emphasis is placed on providing pension benefits to workers in the unorganized sector, who often lack access to formal retirement plans.
It is being discussed that the government may not contribute funds to this new scheme.
Target Audience:
Workers in the unorganized sector.
Self-employed individuals.
Traders.
All Indian citizens aged 18 and above.
Current Status:
The scheme is currently in the planning and development stages, with discussions ongoing within the Ministry of Labour and Employment.
Stakeholder consultations will occur once the proposal document is completed.
In essence, the “Universal Pension Scheme” represents a significant step towards ensuring financial security for a broader segment of India’s population during their retirement years.
