Fiscal strains? Modi govt puts Rs 1,000 pension scheme on ice, 32 lakh employees hit

First it was health, now it is the pension. As the cash-strapped Narendra Modi government cuts expenditure, the schemes for the poor are facing the axe. According to media reports, the minimum pension scheme announced by the government in September has been put on the back burner as the Centre has not issued any instructions about continuation of the scheme to the Employees Provident Fund Organisation, the institution that runs the scheme. The government had in September fixed the minimum pension entitlement at Rs 1,000 for private sector employees under the Employees’ Pension Scheme 1995 (EPFS-95). Under the scheme, for an employee who gets less than Rs 1,000, the government provided the balance to take the pension amount to Rs 1,000 per month. [caption id=“attachment_2192907” align=“alignleft” width=“380”]  Reuters[/caption] The scheme was notified for implementation until March 2015. According to a ToI report, the EPFO has not received any communication about continuing the scheme from April, which has resulted in it coming to a grinding halt. The EPFO officials contacted the Centre for clarity on the issue, but none was forthcoming. So, the EPFO has told its regional offices to discontinue the scheme. From this month, the staff will start getting the pension at the old rates, the report said. “Without the top-up amount, the pension is very meagre. In some cases it comes to around just a couple of hundred rupees,” a senior EPFO officer has been quoted as saying in the report. Meanwhile, trade unions are up in arms against the government for suspending the pension scheme. “All central trade unions would take up the issue with the Prime Minister and write a letter to him demanding resumption of the scheme. We will also launch a nation-wide protest against this decision,” Hind Mazdoor Sabha secretary A.D. Nagpal told PTI. According to the report, the decision to suspend the benefit will immediately hit about 32 lakh pensioners who were earlier getting less than this entitlement. “PM has himself announced the Rs 1000 minimum monthly pension. Has the government done it for six months only?” asks Nagpal, who is also an EPFO trustee. The government has been severely cash strapped, with the initial data showing a huge Rs 90,028 crore shortfall in direct tax collection. Earlier, Reuters had reported that the government has sought to reduce funds for a universal healthcare plan, a scheme Narendra Modi had promised in his election manifesto. The scheme, named the National Health Assurance Mission, was aimed at providing free medicines, diagnostics and insurance for illnesses. The scheme was proposed to be launched in April 2015, but it has been put on ice after even the revised cost estimate by the health ministry at $18.5 billion for five years was perceived to be on the higher side. According to the Reuters report, the prime minister did not approve the scheme and the health ministry was told about the “constraint on India’s financial resources”.