Pension scheme

So, for a ~3,000 pension a month (which is what the new scheme offers), a worker would have had to deposit ~126 (~42 a month multiplied by 3).

But analysts say some of the “disincentives” for poor workers in the erstwhile scheme still show up in the new scheme.

“Yes, the government is giving something for sure. I am not criticising the government on that count at all. But what is the interest rate being offered? Will it be an incentive enough?” asked Kundu, who has devised many welfare schemes. Kundu has been a member of the National Statistical Commission, evaluated minority welfare policies, headed a panel on affordable housing, and was most recently tasked with evaluating Swachh Bharat Abhiyaan (rural), the cleanliness-cum-sanitation programme launched by Modi in 2014.

In the earlier scheme, the interest rate — or rate of return — was about 7.5%. In the new scheme, the rate of return will be determined by the Insurance Regulatory Development Authority, the official cited in the first instance said.

“So, the crux is that for the formal sector, if the interest rate on provident fund is about 8.55%, at least give that much in the case of informal workers too to make the scheme attractive,” Kundu said.

“Even the threshold of ~15,000 [employees earning more don’t qualify for the new scheme] is problematic to me,” said KR Shyam Sundar of XLRI, Jamshedpur.

Those earning ~15,000 fall in the lower middle-class. But those earning much less, say ~3000 a month, will not be keen on parting with anything from their meagre incomes. Their share of contribution should be waived off to expand enrolment, Sundar said.

Like in the old scheme, anyone older than 40 is ineligible for the new scheme. The share of the workforce above 40 years is over 30% as per the 2011 Census. Extrapolating this, 30% of 420 million i nformal workforce comes to 126 million people.

A second government official said that when seen in conjunction with other welfare programmers, the National Democratic