Budget 2020: Tepid response to pension scheme for traders, budget outlay sharply cut

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Published: February 3, 2020 5:05:47 AM

Union Budget 2020 India: round 41 lakh people have joined in the Pradhan Mantri Shram Yogi Maandhan Yojana (PMSYMY) and 19,46,373 have come under the Pradhan Mantri Kisan Maandhan Yojana (PMKMY).

Budget 2020 India, Budget 2020-21Budget 2020-21: Under the voluntary PMKYMS, the government makes a matching contribution as that of the beneficiary.

Union Budget 2020 India: The old-age pension scheme for retail traders, small shopkeepers and self-employed persons, launched in the Budget for 2019-20, seems to have failed to enthuse the intended beneficiaries. Finance minister Nirmala Sitharaman has reduced the budgetary allocation under the Pradhan Mantri Karam Yogi Maandhan Scheme (PMKYMS) for 2020-21 to Rs 180 crore, compared with the budgetary estimate of `750 crore in the current fiscal.
The allocation (BE) for 2020-21, however, was 12.39% higher than the revised estimate of Rs 160.15 crore for 2019-20. As per official figures, only 30,361 ‘vyaparis’ have so far enrolled under the PMKYMS.

Under the voluntary PMKYMS, the government makes a matching contribution as that of the beneficiary. Enrollment into the scheme, aimed at extending the pension benefit to about three crore vyaparis whose annual turnover is within Rs 1.5 crore with the intention of providing them with some sort of social security, was kept simple requiring only Aadhaar and a bank account.

On maturity of the scheme, an individual will be entitled to obtain a monthly pension of Rs 3,000 after attaining the age of 60 years. In case of the death of the subscriber, the spouse is entitled to receive 50% of the amount as family pension. The scheme is open for the 18-40-year age bracket. Contribution ranges between `55 and `200 per month, depending on the age at which one enters the scheme. Those already covered under the EPFO, NPS or ESIC as well as taxpayers are not eligible for the PMKYMS.

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Compared with the PMKYMS, other old-age pension schemes are doing better. Around 41 lakh people have joined in the Pradhan Mantri Shram Yogi Maandhan Yojana (PMSYMY) and 19,46,373 have come under the Pradhan Mantri Kisan Maandhan Yojana (PMKMY). While PMSYMY is a pension scheme meant for unorganised workers, the PMKMY is to provide old-age pension to small and marginal farmers. Sitharaman has kept the budgetary allocation under the PMSYMY at Rs 500 crore for 2020-21, same as 2019-20. The revised estimate for the scheme for 2019-20 has been kept at `408 crore. For the PMKMY, the BE has been kept at Rs 500 crore.

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