Pranab launches pension scheme for unorganised sector

Pranab launches pension scheme for unorganised sector

Union Finance Minister Pranab Mukherjee has launched a new pension scheme for workers in the unorganised sector who do not have access to the social security net.

"I launched the scheme today to coincide with the 78th birthday of Prime Minister Manmohan Singh. This scheme will help those who are not covered under any social security scheme," Mukherjee said after unveiling the programme at a function in Murshidabad district on Sunday.

Under the scheme named 'Swabalamban', the subscribers would get Rs 1,000 from the government each year for a subscription amount of Rs 12,000 per year.

The particular scheme would remain valid for this financial year and for the next three consecutive fiscals.

The finance minister had already allocated Rs 100 crore for this scheme in the budget for 2010-11. The scheme will be managed by the Pension Fund Regulatory and Development Authority of India (PFRDA).

Mukherjee said that 87 percent of the country's workforce would benefit from the 'Swabalamban' scheme.

According to the scheme, a subscriber can enter it at the age of 18 years and will be eligible for pension after attaining 60 years.

He said there were eight crore people above 60 years who were not getting pension. This figure will rise to 20 crore over the next 17 to 18 years.

On attaining 60 years, the pensioner can withdraw 60 percent of his contribution while the balance 40 percent will be given as a monthly annuity by LIC.

LIC has been appointed as one of the many aggregators who will collect subscription amounts from subscribers.

Mukherjee said that while announcing the scheme in the budget, he had asked state governments to join the programme so that the pensioners could benefit by getting a higher pension amount.

"However, only two states -- Haryana and Karnataka -- have responded to the scheme," he said.

Minister of State for Finance N N Meena, LIC chairman T S Vijayan and other senior Finance Ministry officials were present at the event.

Later, Mukherjee inaugurated a branch of the Indian Bank in Jangipur.