Some states have recently announced increased entitlements under the old-age pension scheme. For example, Andhra Pradesh increased the amount of old age pension from around Rs 250 to Rs 2,500 per month in early 2022. More recently, the government of Uttar Pradesh announced an increase in the amount of old age pension. old age pension, bringing it to Rs 2,000 per month.
As Haryana heads to the polls later this year, campaign promises have already been made, one of them being to increase the old age pension to Rs 6,000 per month in the state.
However, despite recent increases in a few states, old-age pension entitlements remain extremely low. While the amount of entitlements under the central government scheme has remained almost stable since 2007, the contribution of state governments has remained low or non-existent. There are several shortcomings in the provision of old-age pensions both at the Center level and at the State level.
In addition, there are huge variations between states in terms of the amount paid to old age beneficiaries. Even the age criterion differs from state to state. The amount of the old age pension scheme ranges from Rs 300 per month in Assam and Madhya Pradesh to Rs 2016 in Telangana.
The number of elderly people in India was estimated at around 137 million in 2021, 51% of them women. According to some estimates, nearly 80 million are eligible for the old-age pension. However, only about 25 million receive the pension. Despite an increase in the number of eligible older people, particularly in the aftermath of the COVID-19 pandemic, central government allocations to the old-age pension scheme have remained stagnant. For the Indira Gandhi National Old Age Pension Scheme, the budget allocation was Rs 6,259 crore in 2020-21 and 2021-22, and was increased only slightly to Rs 6,564 crore in the 2022- budget. 23.
Old Age Pension – A Constitutional Requirement
Article 41 of the Indian Constitution directs the state to provide public assistance to its citizens in the event of “unemployment, old age, sickness and disability within the limits of its economic capacity and development”. The old age pension appears in the concurrent list of the 7th Schedule of the Constitution of India. This implies that the Center and the States have the responsibility to provide social security to the elderly.
While the central government provides old-age pensions under the National Social Assistance Program (NSAP), states are asked to provide an equivalent amount. NSAP is a 100% centrally funded program (CSS) with no government participation. However, the States supplement the central aid from their own resources.
The NSAP was launched in 1995 with the aim of providing social assistance to those most in need. The National Old Age Pension Scheme was one of the components of the NSAP. In 2007, the NSAP was extended to all people living below the poverty line and the old age pension component was renamed Indira Gandhi National Old Age Pension Scheme (IGNOAPS).
IGNOAPS is a non-contributory old age pension scheme which covers Indians aged 60 and over and living below the poverty line. In 2011, the age limit for IGNOAPS was lowered from 65 to 60 years old, and the amount of the monthly pension for those aged 80 and over was raised from Rs 200 to Rs 500. Thus, within the framework Under the scheme, BPL persons aged 60 or over are entitled to a monthly pension of Rs. 200 up to age 79 and Rs.500 thereafter.
This means that elderly people living below the poverty line receive a pittance of around Rs 7 per day as income security for those aged 60 to 79 and around Rs 16 per day for those aged 80. years and older.
Old age pension – gender difference
Recent data reveals that in many states, the proportion of men obtaining IGNOAPS is higher than that of women. This is despite the fact that in many of these states the proportion of older women living alone is much higher than that of men.
These observations emerge from the first-ever national survey on the elderly in India – the Longitudinal Age Survey of India 2017-18. This is the largest longitudinal study of aging in the world. The LASI Wave 1 constitutes a complete demographic profile of 72,250 people aged 45 and over.
LASI data shows that in states such as Himachal Pradesh, Telangana, Andhra Pradesh, Haryana, Uttarakhand, Madhya Pradesh and Odisha, a greater proportion of men than women benefit of the benefits of IGNOAPS.
The data also reveals that the proportion of older women living alone is higher than that of men in most states.
In Andhra Pradesh, 48% of elderly men receive the IGNOAPS old-age pension, while only 20% of elderly women receive the IGNOAPS pension. In Odisha, 48% of elderly men receive an IGNOAS pension compared to 37% of elderly women. If we look at the proportion of elderly men and women (over 45) remaining alone, we see that in Andhra Pradesh nearly 7% of women remain alone against 2% of men. In Odisha, 1% of elderly men remain alone compared to 5% of elderly women.
It clearly shows that the central government and the state governments are responsible for ensuring that older women are provided with adequate social security.
Low and stagnant amount despite several recommendations
NSAP entitlement amounts have remained the same since 2007. 22nd Report of the Standing Parliamentary Committee (2021-22) noted that the upward revision of the amount of assistance under the different components of the NSAP scheme is highly anticipated. He also indicated that the Committee had also recommended an increase in the 13th (2019-2020) and 17th reports, but that there had been no increase in the pension amounts. Therefore, in its latest report, the Committee strongly recommended that the Department of Rural Development “take seriously the issue of increasing the amount of pensions under the NSAP and deliver the result on the ground as soon as possible” .
In 2013, a Comprehensive Social Assistance Program Task Force report submitted to the Indian government also recommended increasing the monthly pension and extending coverage.
The Supreme Court had in 2018 declared that the Center and the States should review the granting of the pension to the elderly to make it more realistic, recalling that the amount had been fixed in 2007.
“Such paltry sums are a travesty. Even if you have to buy a bottle of water, it comes to Rs 20. With Rs 7 a day as an old age pension, how is it possible to meet the expenses. Besides , the BPL category of the elderly are those who have no savings or any other social safety net.Even the lowest category of government officials receive a pension of Rs 1000 per day.If the government pensions are increased according to the dearness allowance, why not also increase the pension for the BPL poor people according to the price increase,” said Shankar Singh, a renowned grassroots activist and member of Mazdoor Kisan Shakti Sangathan.
One of the main demands of activists and experts working on the issue and associated with the Pension Parishad – a vast network of organizations and activists – is that the amounts be indexed to inflation and undergo regular revisions like wage rates . In budgetary terms, they demand to increase the allocation from the current meager amount of 0.45% of GDP to a modest 1.45% of GDP.
The request is also to expand the coverage of the program to include all older adults, except taxpayers, in order to equip older adults to competently handle age-related issues. The program must be extended to at least all households that do not meet even one criterion of economic well-being out of the seven mentioned by the socio-economic census of castes.
Shankar added: “How can you expect an octogenarian in the BPL category to work under schemes such as the Rural Employment Guarantee or MGNREGA. Our demand is that an elderly person should receive at least the half of the minimum wage as a pension. This amounts to about Rs 4000 per month.” Drawing attention to the longstanding claim and slogan of activists fighting for decent pensions as a workers’ and people’s right, he called for “Budhape mey Aaraam do, Pension aur Samman do!” respect!).”
(This story was supported in part by Tableau Foundation Fellowship and Equal Measures 2030)