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Friday, 8 March 2013

Defer old-age pension scheme till 2017: Panel

A government panel set up to review the government pension scheme has recommended delaying the monthly old-age pension scheme, aimed to cover an estimated 4.26 crore old and poor, till end-2017 that also marks the expiry of the 12th five year plan. It has also recommended that the pension amount be increased to Rs 500 per month - roughly 25% of the existing minimum wages - by 2017.

With the civil society - in the form of a federation of more than 100 groups called Pension Parishad รข€” negotiating with the Union rural development ministry, the government is expected to take a call on the report soon. Sources suggest the government is likely to respond within the next couple of days, and make its stand clear.

The panel, while admitting that the government is obliged to link the pension benefits to minimum wages and delink it from outdated poverty lines, has recommended a staggered approach to rectify the low pension rates and coverage over the next five years.

The report notes that even if the government was to accept the much criticized poverty line levels of the Tendulkar Committee submissions, the monthly old age pension would ideally need to be fixed at Rs 950. Now, it is fixed at Rs 200 per month, and the panel has recommended raising it by another Rs 300 per month.

On the issue of total coverage, too, the panel has dithered from recommending the numbers it believes need to get pension support. The panel, headed by Planning Commission member Mihir Shah, has pushed for a staggered approach with the coverage being extended to an estimated 4.26 crore people only by 2017. It has noted that the use of old below poverty line (BPL) list has led to massive exclusion of deserving senior citizens. It has also acknowledged that the government has committed to doing away with the BPL criterion and shift to using an 'exclusion list' such as the one planned for the national food security bill based on the socio-economic survey.

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