51 eminent economists write to FM for social security pensions and maternity benefits
In a letter written to Finance Minister Nirmala Sitharaman, Jean Drèze and 50 other eminent economists have flagged two priorities for the next Union Budget: an increase in social security pensions and adequate provision for maternity benefits. These economists had earlier raised these issues before the Union Budget 2018-19.
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In a letter written to Finance Minister Nirmala Sitharaman on 5 December 2022, Jean Drèze and 50 other eminent economists have flagged two priorities for the next Union Budget: an increase in social security pensions and adequate provision for maternity benefits.
Regarding social security pensions, the letter says that the central government’s contribution to old-age pensions under the National Old Age Pension Scheme (NOAPS) scheme has stagnated at just Rs 200 per month since 2006. According to these economists, this is unfair. It is also a missed opportunity: NOAPS is a good scheme that reaches some of the poorest members of society. It has low leakages and administrative costs.
The central government’s contribution, these economists feel, should be immediately raised to Rs 500 at the very least. This requires an additional allocation of Rs 7,560 crores or so, based on the current NOAPS coverage of 2.1 crore pensioners. Similarly, widow pensions should be raised from Rs 300 per month to Rs 500 at the very least. This would cost just another Rs 1,560 crores.
On the issue of maternity benefits, the letter says that maternity benefits of Rs 6,000 per child are a legal entitlement of all Indian women — except those already covered in the formal sector — under the National Food Security Act (NFSA) 2013. For many years, feel these economists, the central government did not act on this. In 2017, a scheme was finally launched for this purpose: the Pradhan Mantri Matru Vandana Yojana (PMVVY). However, the provision made for it in the Union Budget never exceeded Rs 2,500 crore — less than one-third of what is required based on NFSA norms. Further, in flagrant violation of the Act, says the letter, PMMVY restricts the benefits to Rs 5,000 for just one child per woman.
According to these economists, the Union Budget 2023-24 should provide for the full-fledged implementation of maternity entitlements as per NFSA norms. Assuming a birth rate of 19 per thousand, effective coverage of 90 per cent and 60 : 40 ratio for centre : state contributions, this requires at least Rs 8,000 crore. Along with this, the illegal restriction of maternity benefits to one child per woman should be removed.
The letter says that it is also important to streamline payment systems so that pensions reach the recipients on time every month, i.e., by the 7th day of the month, as directed by the Supreme Court in its order of 28 November 2001.
These economists had earlier raised these issues before the Union Budget 2018-19. “Since both proposals were ignored, we are writing again, well in advance of the next Budget, with the same recommendations,” says the letter.
The signatories to the letter are 51 eminent economists, including Jean Drèze, Aditya Bhattacharjea, Dibyendu Maiti, Partha Sen, Pulin Nayak and Uday Bhanu Sinha from the Delhi School of Economics; Ashwini Deshpande, Bharat Ramaswami and Pulapre Balakrishnan from the Ashoka University; Himanshu from JNU; and C Rammanohar Reddy, Editor, The India Forum.
