Old age pension will also to be paid via banks

Written by Oineetom Ojah | Sandip Das | New Delhi, Oct 7 | Updated: Oct 8 2008, 05:51am hrs
Buoyed by the success of paying wages through bank and post office accounts under the National Rural Employment Guarantee Act (NREGA), the government has decided to extend the facility to the beneficiaries under the recently relaunched and rechristened National old age pension scheme.

The ministry of rural development is working out the modalities of payment of pension under the Indira Gandhi National Old Age Pension Scheme (IGNOAPS) in consultation with finance and communication ministries which would benefit around 1.6 crore aged persons in the country.

We have asked the states to implement the new pension scheme in a manner that all eligible persons are covered and that the pension is credited into a post office or bank account of the beneficiary as has been done for payment of wages under NREGA, Rita Sharma, Secretary, ministry of rural development told FE .

The government had re-launched IGNOAPS in November last year, which covers all the people who are above 65 years living below poverty. The scope of the new IGNOAPS had been widened to cover almost 1.6 crore old BPL people from the earlier level of 87 lakh. The extension of the scheme is estimated to cost the Centre about Rs 4,300 crore in the current year.

The scheme was expanded following an announcement made by Prime Minister Manmohan Singh in his Independence Day speech last year. The scheme in its earlier form, National Old Age Pension Scheme launched in 1995, covered old destitute people. Sharma said that the rural development ministry has been consistently discussing the issue of financial inclusion with finance and communication ministries for promoting the instrument of banks for payment of wages or pensions.

Under IGNOAPS, some states like Goa and Delhi have decided to contribute Rs 800 and Rs 400 respectively as premium under the social security programme along with the Centres contribution of Rs 200 per month. However, there are some states that do not have enough resources to contribute even the Rs 200, Sharma said. The contribution from the states towards the pension scheme is, however, optional.

For ensuring timely payment and avoiding involvement of middlemen in wage payment to workers under the NREGS, more than two crore savings bank account have been opened in banks and post offices across the country. Of these more than 1.1 lakh accounts have been opened with the post offices and the rest with public sector or cooperative banks across the rural belt.

Regarding the availability of reliable data about BPL people, an issue stated as a problem by the labour ministry hindering implementation of the Rashtriya Swasthya Bima Yojana, another scheme targeted at BPL population, Sharma said the implementation of the pension scheme would be based on the existing BPL data provided by the Planning Commission according to which there are about 22 crore BPL in rural areas and 6 crore in urban India.