Economists ask Jaitley to hike pension, maternity benefits

Sixty prominent economists on Wednesday wrote to Finance Minister Arun Jaitley seeking an increase in social security pensions and better maternity benefits in the 201819 Budget.

The economists who signed the letter included Jean Drèze , Abhijit Banerjee, Ajit Ranade, Jayati Ghosh, Kirit Parikh, Mihir Shah, Rohini Pande, and Vijay Joshi.

The letter argued that the Centre’s contribution to oldage pensions under the National Old Age Pension Scheme (NOAPS) has been ~200 a month since 2006. “This is extraordinarily stingy. 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,” it said, and requested that the Centre’s contribution should immediately be raised to ~500 at the very least.

This requires an additional allocation of ~8,640 crore or so, based on the current NOAPS coverage of 24 million pensioners, the letter said, and added that widow pensions should be raised from ~300 a month to at least ~500 as well. This would cost another ~1,680 crore.

The letter by the economists also said that on December 31, 2016, in the aftermath of demonetisation, Prime Minister Narendra Modi said enhanced maternity benefits would be provided by the Centre soon. However, the new scheme framed for this purpose, the Pradhan Mantri Matru Vandana Yojana, had not yet been operationalised and the provision made for this scheme in Budget 2017-18, of ~2,700 crore, was not enough.

“Maternity benefits of ~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 more than three years, the central government did virtually nothing about this,” the letter said. “In flagrant violation of the Act, PMMVY restricts the benefits to ~5,000 for just one child per woman. The Union Budget 2018-19 should provide for full-fledged implementation of maternity entitlements as per NFSA norms.” The letter said such a commitment would require at least ~8,000 crore, based on a 60:40 ratio from the Centre and states, respectively.

“Along with this, it is very important to streamline the payment systems so that pensions and maternity benefits reach the recipients on time every month, e.g. by the 7th day of the month, as directed by the Supreme Court in its order of 28 November 2001,” the letter added.