Economists & academicians write to Nirmala Sitharaman seeking increase in social security pensions

Fifty-one economists and academicians on Monday wrote to Finance Minister Nirmala Sitharaman seeking an increase in social security pensions, and adequate provision for maternity benefits in the upcoming Union Budget, saying their letters to her predecessor Arun Jaitley on these issues were "ignored".

They also said it is important to streamline payment systems so that pensions reach the recipients by the seventh day of the month as directed by the Supreme Court in its order of November last year.

The letter was signed by Jean Dreze (Delhi School of Economics), Dipa Sinha (Ambedkar University, Delhi), KP Kannan (Centre for Development Studies, Thiruvananthapuram), Pulapre Balakrishnan (Ashoka University), Sukhadeo Thorat (Professor Emeritus, JNU) and Reetika Khera (IIT-Delhi) among others.

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"This is a follow-up to our letters of 20 December, 2017 and 21 December, 2018 (addressed to your predecessor Arun Jaitley), where we tried to flag two priorities for the next Union Budget -- an increase in social security pensions, and adequate provision for maternity benefits. Since both proposals were ignored, we are writing again, well in advance of the next Budget, with the same recommendations," the letter said.

According to the letter, the Centre'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.

"This is unfair. It is also a missed opportunity. NOAPS is a good scheme (with low leakages and administrative costs) that reaches some of the poorest members of society. The Centre’s contribution should be immediately raised to Rs 500 (preferably more) at the very least," the letter said.

The academics noted that it requires an additional allocation of Rs 7,560 crore 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 and this would cost just another Rs 1,560 crore, it said.

The letter noted that the 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 2013.

"For many years, 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, which is less than one third of what is required based on NFSA norms," the letter said.

"Further, in flagrant violation of the Act, PMMVY restricts the benefits to Rs 5,000 for just one child per woman. The Union Budget 2023-24 should provide for full- fledged implementation of maternity entitlements as per NFSA norms. This requires at least Rs 8,000 crores (assuming a birth rate of 19 per thousand, effective coverage of 90% and 60:40 ratio for centre:state contributions)," it said.

Along with this, the letter added, the illegal restriction of maternity benefits to one child per woman should be removed.