GS 2: Governance | Government policies and interventions for development in various sectors

Why in News?

The central govt. of India has introduced the new pension scheme i.e. Pradhan Mantra Shram Yogi Mandhan (PMSYM) for Labour/ Worker in Unorganised Sector. This pension scheme is announced by Union Finance Minister Piyush Goyal in this Interim Budget 2019-20.

Features of Pradhan Mantra Shram Yogi Mandhan (PMSYM) scheme:

  • The scheme is for informal sector or unorganised sector workers.
  • Subscribers to the scheme are assured of a monthly pension of Rs. 3000 per month after they reach 60 years age. The subscribers have to pay a monthly amount of Rs. 100 if the subscriber joins at age 29 and Rs. 55 if the subscriber joins the scheme at 18.
  • The same amount will be matched by the government.
  • The scheme is eligible for persons aged between 18 and 40 and are earning Rs. 15000 are less per month. The scheme is estimated to benefit 10 Crore workers from informal sector.
  • The government has allocated an initial fund of Rs. 500 crore for the scheme.

Unorganised Sector:

  • The unorganized sector in the country constitutes unincorporated entities having less than 10 workers and is owned by individuals or households.
  • The sector also includes people working independently in non-formal work which needs minimal skills. The sector contributes over 50% to the Indian GDP.

Significance of the scheme:

  • It is estimated that over 42 corer workers in India are working in the informal sector.
  • As per the India Labour Market Update of 2016, 82% of the Indian workforce is in unorganised sector.
  • The workers of the sector include street vendors, rag pickers, porters, beedi workers, rickshaw pullers, agricultural labourers etc. The nature of their job and the income they receive are not stable. Often due to non-availability of any laws to protect their interest they are subjected to violation by the employers. These uncertain earnings puts pressure on them financially and need some kind of monetary protection to lead a life with means after their productive years.
  • It is why social security schemes such as Pradhan Mantri Shram Yogi Mandhan (PMSYM) become necessary where the government is contributing in the premium amount.
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