27-December-2024-Editorial

PRADHAN MANTRI SHRAM YOGI MAANDHAN YOJANA (PM-SMY)

The Pradhan Mantri Shram Yogi Maandhan Yojana (PM-SMY) is a pension scheme introduced in 2019 to provide financial security to workers in the unorganised sector. However, a recent report by a Parliamentary Standing Committee highlights significant issues with the scheme’s implementation and performance, including low enrolment and reduced funding.

Key Features of PM-SMY

About the Scheme

• Launched in 2019 as a Central Sector Scheme by the Ministry of Labour and Employment.
• Managed by the Life Insurance Corporation of India (LIC), which serves as the Pension Fund Manager.

Target Group

• Workers aged 18 to 40 years in the unorganised sector, such as street vendors, agricultural workers, domestic workers, and construction labourers.
• Monthly income of the beneficiaries should not exceed ₹15,000.

Contributions

• Workers contribute a monthly amount ranging from ₹55 to ₹200, depending on their age at the time of enrolment.
• The government matches the worker’s contribution.

Pension Benefits

• Provides a pension of ₹3,000 per month after the age of 60.
• In case of the subscriber’s death, the spouse receives 50% of the pension amount as family pension.
• No lump sum benefit is provided if the subscriber dies before reaching 60 years of age.

Observations of the Parliamentary Standing Committee

Poor Performance

• Enrolment has been significantly below target, with only 5 million workers enrolled by FY 2023-24, against a target of 100 million by 2023.
• Government funding has decreased drastically, from ₹324.23 crore in FY 2021-22 to ₹162.51 crore in FY 2023-24.

Challenges in Implementation

• Irregular income and financial instability make it difficult for workers to pay the monthly premium.
• The COVID-19 pandemic further worsened the financial condition of unorganised workers.
• Structural challenges, such as lack of documentation and awareness, have hindered access to the scheme.
• Existing alternatives like the Atal Pension Yojana (APY) have created confusion among workers.

Extension of the Scheme

• The scheme has been extended until 2025-26 to explore revisions and make it more attractive to unorganised workers.

Recommendations for Improvement

• Increasing Eligibility Age: Extend the maximum age for enrolment from 40 to 50 years to include older workers.
• Scheme Consolidation: Merge PM-SMY with similar schemes, such as Atal Pension Yojana (APY) and Pradhan Mantri Laghu Vyapari Maan-Dhan Yojana, to ensure better coverage and simplify implementation.
• Leveraging the e-Shram Portal: Use the e-Shram portal, which has a database of over 305 million unorganised workers, for streamlined enrolment.
• Subsidies through Direct Benefit Transfer (DBT): Provide financial assistance to help workers who cannot afford the monthly contributions.
• Awareness Campaigns: Conduct outreach programs to educate workers about the scheme and dispel any misinformation.

About Parliamentary Committees

Parliamentary Committees (PCs) are groups of Members of Parliament (MPs) appointed to handle specific tasks or review policies and legislation.

Their authority stems from Article 105 (privileges of MPs) and Article 118 (rules for procedure and conduct of business) of the Constitution.

Need for Committees

• With limited time for detailed discussions in Parliament, PCs ensure thorough examination of bills and policies.
• They promote expert input, cross-party consensus, and effective legislative work.

Types of Committees

• Standing Committees: Permanent bodies handling financial matters, departmental oversight, and procedural tasks.
• Ad Hoc Committees: Temporary panels formed for specific purposes, such as inquiries or advisory tasks, which dissolve after completing their mandate.

Profile of Unorganised Workers

According to the Unorganised Workers’ Social Security Act, 2008, these workers include self-employed individuals, home-based workers, and wage workers without formal employer-employee relationships.

Workers in the organised sector who are not covered under major labour laws are also considered unorganised.

Challenges Faced

• Lack of stable income, social security, and access to welfare programs.
• Dependence on informal employment with limited legal protections.

Initiatives for Unorganised Workers

• e-Shram Portal: A national database of unorganised workers to help streamline welfare measures.
• Atal Pension Yojana (APY): A government-backed pension scheme targeting workers in the informal sector.
• Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): Provides life insurance coverage at affordable premiums.
• Pradhan Mantri Shram Yogi Maandhan (PM-SMY): Ensures pension benefits for unorganised workers post-retirement.
• Mahatma Gandhi Bunkar Bima Yojana: Offers insurance for handloom weavers.
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Focuses on skill development and employment opportunities.
• Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY): Provides health insurance to economically vulnerable families.

Conclusion

The Pradhan Mantri Shram Yogi Maandhan Yojana was envisioned to provide a safety net for India’s unorganised workers. However, its poor performance calls for urgent reforms. By addressing structural barriers, leveraging digital tools, and improving awareness, the scheme can achieve its objectives of financial security and social inclusion for millions of unorganised workers.