New Delhi:The government on Friday announced a pension scheme targeting at least 100 million workers in the unorganized sector, such as drivers, maids and cobblers, in a bid to woo a critical voter group that Prime Minister Narendra Modi is seeking to sway ahead of a general election due by May.
In the interim budget for 2019/20, acting finance minister Piyush Goyal said the government would spend 5 billion rupees ($70.06 million) to launch what could become “the world’s largest pension scheme”.
The unorganized sector of India’s economy is vast, employing an estimated nine out of 10 workers. But experts note that such targeted pension schemes already exist, and would likely have limited benefits. Others said that such schemes have failed to win much buy-in previously, and so might disappoint as a vote winner.
“Right now, the value would be in that they have announced it. By the time, it’s actually done the elections will be over,” said Sebastian Morris, an economics professor at the Indian Institute of Management in Ahmedabad.
The new programme, to be implemented this year, will provide an assured monthly pension of 3,000 rupees once workers reach 60 years.
“A worker joining the pension yojana (scheme) at 18 years, will have to contribute as little as 55 rupees per month only,” Goyal said in his budget speech, providing few other details.
India’s estimated 420 million unorganized workers – including daily-wage labourers, rag-pickers, rickshaw drivers and maids – have few social security nets.
