Pooropoly Biz & Economy

Pensions: How The Government’s Schemes Hit The Wrong Notes

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Poverty and India has mutually existed since decades and it has been plaguing our economy since independence. But however, times and again, the government initiated and looked upon this issue in various manners in order to eradicate it from the nation.

But, there are severe loopholes in the implementation of such initiatives. Here, are few of the imbalances in various parameters which need to be checked and rechecked:

1. Have’s v/s have-not’s

Pensions give financial security during old age when they cannot earn a regular source of income. It involves a number of schemes provided by the central as well as the state government. But however, often the benefits are not reaped by people who actually need it.

In a country like India where 21.9 % lives below national poverty level, the focus of the government needs to be aiding the poor than the already stable population.

Pension schemes like Yash Bharti Samman in Uttar Pradesh, which recently got ceased was awarding a monthly pension amount of Rs. 50,000 to persons gaining eminence in the fields of films, art, literature and sport. Whereas a pension plan for poor like Destitute Widow Pensions (DWP) in Karnataka, avails of Rs. 400 per month to a widow who belongs to a BPL household whose husband is legally dead and had an income not exceeding Rs. 6,000 per annum.

Hence, the purpose and distribution of the pensions should be channelized such that it majorly benefits the poor.

2. Daily wages v/s premiums

In India, monthly income of 74% of the rural population, who constitute 73% of the total Indian population, was less than Rs. 5000. Unaffordable premiums due to insufficient and irregular wages set aback the actual needy population from being benefited by these pension schemes.

An individual, who earns a monthly income less than his actual household expense, finds it difficult to invest into schemes and programs for future security. Unemployment due to lack of skills or over-population leaves a major sect of the population without proper income in order to entitle to these schemes.

3. Awareness v/s myths

Lack of awareness regarding pension eligibility keeps the needy illiterate population in a myth that they aren’t eligible. Inefficient communication regarding provision and eligibility between the authorities and benefit seekers at the grass-roots level results in a poor population deprived of such benefits.

4. Provisions v/s distributions

The dispersed pension benefits are most often delayed or in the worst scenario do not reach the beneficiaries for multiple reasons. Due to inefficient and unmonitored distribution systems, the benefits do not reach the actual needy population.

A report by the Institute for Social and Economic Change reflects an unheard side of the social security schemes distribution process. The study uncovers loopholes like unauthorized payments to agents, forged enrollments, lack of basic infrastructure and human resource. Such flaws result in benefits of pension being delayed and delivered into wrong hands.

For instance, due to security reasons, the postman can carry only Rs. 10,000 a day for dissemination. This results in a further delay in distribution of scheme benefits.

Thus, even though the government intends to aid the needy, it fails to fulfill it due to various flaws. It needs to examine and study the ground reality and then devise and implement a proper well developed social security scheme system. This would ensure that the schemes benefit the right population at the right time within the country.

Pensions: How The Government’s Schemes Hit The Wrong Notes was last modified: by
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