Union Budget addresses steps on social security

With over 400 million informal workers with no social security coverage, and 100 million old people who do not get pension, Budget 2015/16 had much to offer to this vulnerable lot.

Finance Minister Arun Jaitley not only acknowledged the problem of this growing insurance and pension-less population but also stressed the need for creating a universal social security system for all Indians, specially the poor and the under-privileged.

With three schemes - Pradhan Mantri Suraksha Bima Yojna, Atal Pension Yojana and Pradhan Mantri Jeevan Jyoti Bima Yojana - the government seems committed to not only enhancing the financial inclusion net but also encouraging people to save by making these schemes contributory.

In order to encourage people to join the Atal Pension Yojana, which will provide a defined pension depending on the contribution and its period, the government will contribute 50 per cent of the beneficiaries' premium limited to Rs 1,000 each year, for five years, in the new accounts opened before December 31, 2015.

By making the scheme contributory, the government has indicated that self provision would be the way forward for pensions, at least for the segment which earns a regular income and can save and invest small amounts for their old age.

Similarly, both Pradhan Mantri Suraksha Bima Yojna, which will cover accidental death risk of Rs 2 lakh for a premium of just Rs 12 per year, and Pradhan Mantri Jeevan Jyoti Bima Yojana, which covers both natural and accidental death risk of Rs 2 lakhs at a premium of Rs 330 per year for the age group 18-50, are hailed as welcome moves on the part of the government.