New Delhi: Several economists have written to finance minister Nirmala Sitharaman asking her to take up their recommendations to increase social security pensions and provide adequate maternity benefits in the next budget.
In a letter, 51 economists said that the Union government’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”. It should immediately be raised to Rs 500 – if not more – and would require an additional allocation of around Rs 7,560 crore to help 2.1 crore pensioners.
They said that though maternity benefits of Rs 6,000 per child are a legal entitlement of all Indian women who are not covered by the formal sector under the National Food Security Act, 2013, the Union government has not acted on this for many years. While the Pradhan Mantri Matru Vandana Yojana was started in 2017 for this purpose, the provisions made in the Union Budget never exceeded even one-third of what is required based on NFSA norms.
“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). Along with this, the illegal restriction of maternity benefits to one child per woman should be removed,” they said.
The economists said that they had sent two similar letters to Sitharaman’s predecessor Arun Jaitley in December 2017 and 2018 with similar proposals, both of which were ignored.
Among the signatories of the letter are Ashwini Deshpande, Jean Drèze, Pulapre Balakrishnan, Sukhadeo Thorat, Vijay Joshi, Farzana Afridi and Naresh Saxena.
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Social Security Pensions and Maternity Entitlements
This is a follow-up to our letters of 20 December 2017 and 21 December 2018 (addressed to your predecessor, Shri 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. Our argument, much as before, is as follows.
1. Social security pensions: The central government’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 central government’s contribution should be immediately raised to Rs 500 (preferably more) at the very least. This requires an additional allocation of Rs 7,560 crores or so, based on the current NOAPS coverage (2.1 crore pensioners). Similarly, widow pensions should be raised from Rs 300 per month to Rs 500 at the very least. This would cost just another Rs 1,560 crores.
2. Maternity entitlements: 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 – less than one third of what is required based on NFSA norms. 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). Along with this, the illegal restriction of maternity benefits to one child per woman should be removed.
It is also important to streamline payment systems so that pensions reach the recipients on time every month, i.e. by the 7th day of the month as directed by the Supreme Court in its order of 28 Nov 2001.
We urge you to accept these modest recommendations.
Yours sincerely,
Signatories (in alphabetical order)
1. Abhijeet Singh (Assistant Professor of Economics, Stockholm School of Economics)
2. Aditya Bhattacharjea (Professor of Economics, Delhi School of Economics)
3. Arjun Jayadev (Professor of Economics Azim Premji University)
4. Ashwini Deshpande (Professor of Economics, Ashoka University)
5. Atul Sarma (Visiting Professor, Institute for Studies in Industrial Development, Vasant Kunj)
6. Bharat Ramaswami (Professor of Economics, Ashoka University)
7. C. Rammanohar Reddy (Editor, The India Forum)
8. Debraj Ray (Professor of Economics, New York University)
9. Deepti Goel (Associated Professor of Economics, Azim Premji University)
10. Dibyendu Maiti (Professor of Economics, Delhi School of Economics)
11. Dilip Mookherjee (Professor of Economics, Boston University)
12. Dipa Sinha (Assistant Professor, Ambedkar University, Delhi)
13. Farzana Afridi (Professor of Economics, Indian Statistical Institute, New Delhi)
14. Gaurav Datt (Associate Professor of Economics, Monash University)
15. Himanshu (Associate Professor of Economics, Jawaharlal Nehru University)
16. Jean Drèze (Honorary Professor, Delhi School of Economics)
17. Jeemol Unni (Professor of Economics, Ahmedabad University)
18. K. Nagaraj (Adjunct Professor, Asian College of Journalism)
19. K.P. Kannan (Honorary Fellow, Centre for Development Studies, Trivandrum)
20. Kirit Parikh (Chairman, Integrated Research and Action for Development, New Delhi)
21. Leela Visaria (Honorary Professor, Gujarat Institute of Development Research, Ahmedabad)
22. Maitreesh Ghatak (Professor of Economics, London School of Economics)
23. Mausumi Das (Associate Professor of Economics, Delhi School of Economics)
24. Nalini Nayak (retired Associate Professor, PGDAV (M) College, New Delhi)
25. Naman Garg (Research Scholar, Columbia University)
26. Naresh Saxena (retired Secretary, Planning Commission)
27. Partha Sen (Retired Professor, Delhi School of Economics)
28. Paul Niehaus (Associate Professor of Economics, University of California San Diego)
29. Pranab Bardhan (Professor Emeritus of Economics, University of California Berkeley)
30. Pranab Mukhopadhyay (Professor of Economics, Goa University)
31. Pulapre Balakrishnan (Professor of Economics, Ashoka University)
32. Pulin Nayak (retired Professor of Economics, Delhi School of Economics)
33. R. Nagaraj (Professor of Economics, Indira Gandhi Institute of Development Research, Mumbai)
34. Raji Jayaraman (Professor of Economics, ESMT Berlin)
35. Ravinder Kaur (Professor, Indian Institute of Technology, Delhi)
36. Reetika Khera (Professor of Economics, Indian Institute of Technology Delhi)
37. Rohini Somanathan (Professor of Economics, Delhi School of Economics)
38. S. Mahendra Dev (Director, Indira Gandhi Institute of Development Research, Mumbai)
39. S. Subramanian (former Professor of Economics, Madras Institute of Development Studies)
40. Santosh C. Panda (Vice President, South Asian University)
41. Shreekant Gupta (Professor of Economics, Delhi School of Economics)
42. Srijit Mishra (Professor of Economics, Indira Gandhi Institute of Development Research)
43. Sudha Narayanan (Associate Professor, Indira Gandhi Institute of Development Research)
44. Sugata Bag (Associate Professor of Economics, Delhi School of Economics)
45. Sujata Visaria (Associate Professor of Economics, Hong Kong University of Science & Technology)
46. Sukhadeo Thorat (Professor Emeritus, Jawaharlal Nehru University)
47. Sunil Kanwar (Professor of Economics, Delhi School of Economics)
48. Swati Dhingra (Associate Professor of Economics, London School of Economics)
49. Tridip Ray (Professor of Economics, Indian Statistical Institute)
50. Uday Bhanu Sinha (Professor of Economics, Delhi School of Economics)
51. Vijay Joshi (Emeritus Fellow, Merton College, Oxford University)