Daily Current Affairs : 26-December-2024
The Pradhan Mantri Shram Yogi Maandhan Yojana (PM-SMY) is a pension scheme aimed at providing financial security to workers in India’s unorganised sector. Launched in 2019, it was designed to help street vendors, domestic workers, construction labourers, and agricultural workers, who typically do not have access to formal retirement benefits. However, a recent Parliamentary Standing Committee (PSC) report has raised concerns about the poor performance of this scheme, largely due to low enrolment and insufficient government funding.
Key Features of PM-SMY
- Target Beneficiaries: The scheme focuses on unorganised workers aged between 18 and 40 years, with a monthly income of up to Rs 15,000.
- Contribution: Beneficiaries are required to make monthly contributions ranging from Rs 55 to Rs 200, depending on their age at the time of joining. The government matches this contribution.
- Pension Benefits: The scheme promises a pension of Rs 3,000 per month once the beneficiary turns 60. If the worker dies before 60, their spouse will receive 50% of the pension as a family pension.
Highlights from the PSC Report
The PSC report highlights several critical issues impacting the success of PM-SMY:
- Poor Enrolment and Reduced Funding: The scheme’s performance has been disappointing, with only 5 million workers enrolled by FY24, far short of the target of 100 million. Government funding has also decreased, dropping from Rs 324 crore in FY 2021-22 to just Rs 162 crore in FY 2023-24.
- Challenges in Participation: Many unorganised workers struggle to afford the monthly premium due to their unstable income, particularly after the financial setbacks caused by the Covid-19 pandemic.
Reasons for Underperformance
Several factors have contributed to the scheme’s underperformance:
- Income Instability: Workers in the unorganised sector often have irregular incomes, making it difficult to commit to monthly pension contributions.
- Lack of Awareness: Many workers are unaware of the scheme or confused by the presence of other pension schemes like the Atal Pension Yojana (APY).
- Impact of Covid-19: The pandemic worsened the financial situation for unorganised workers, making it even harder for them to participate.
- Structural Barriers: The absence of formal employer-employee relationships in the unorganised sector has made it challenging for workers to access the scheme, due to insufficient documentation and awareness.
Recommendations for Improvement
The PSC report suggests several measures to improve the effectiveness of PM-SMY:
- Expand Eligibility: The age limit should be increased from 40 to 50 years, allowing older unorganised workers to join the scheme.
- Scheme Merger: Merging PM-SMY with other pension schemes like APY and the Pradhan Mantri Laghu Vyapari Maan-Dhan Yojana could streamline coverage and benefits.
- Utilise the e-Shram Portal: With over 305 million unorganised workers already registered on the e-Shram portal, integrating PM-SMY with this platform could improve enrolment and reach.
- Direct Benefit Transfer (DBT): Offering subsidies through DBT could help workers who are unable to afford their contributions.
- Awareness Campaigns: The government should conduct targeted campaigns to improve awareness about the scheme and reduce misinformation.
Important Points:
- PM-SMY Overview: A pension scheme for unorganised workers, launched in 2019, targeting those with an income of up to Rs 15,000.
- Contribution: Workers contribute Rs 55 to Rs 200 per month, with the government matching this amount.
- Pension Benefits: Promises Rs 3,000 per month after age 60; spouse receives 50% if the worker dies before 60.
- Performance Issues:
- Only 5 million workers enrolled by FY24, falling far short of the 100 million target.
- Government funding halved from Rs 324 crore in FY 2021-22 to Rs 162 crore in FY 2023-24.
- Challenges for Workers:
- Irregular income and unstable employment make it hard for workers to afford the monthly contributions.
- Covid-19 worsened financial conditions, reducing workers’ ability to participate.
- Lack of awareness and confusion due to other pension schemes like APY.
- Recommendations for Improvement:
- Expand eligibility age from 40 to 50 years to include older workers.
- Merge PM-SMY with other schemes like APY for better coverage.
- Integrate PM-SMY with the e-Shram portal to improve enrolment and reach.
- Introduce Direct Benefit Transfer (DBT) to subsidise contributions for workers who cannot afford to pay.
- Launch targeted awareness campaigns to educate workers about the scheme.
Why In News
A Parliamentary Standing Committee (PSC) report has raised significant concerns over the underperformance of the Pradhan Mantri Shram Yogi Maandhan Yojana (PM-SMY), a pension scheme designed for workers in the unorganised sector, citing low enrolment, insufficient funding, and challenges in beneficiary participation. The report highlights the urgent need for reforms to enhance the scheme’s reach and effectiveness.
MCQs about Pradhan Mantri Shram Yogi Maandhan Yojana
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What is the primary target group of the Pradhan Mantri Shram Yogi Maandhan Yojana (PM-SMY)?
A. Government employees
B. Workers in the unorganised sector
C. Corporate sector employees
D. Farmers with land holdings
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What has been the primary reason for the underperformance of PM-SMY according to the Parliamentary Standing Committee (PSC) report?
A. Lack of awareness
B. High premium amounts
C. Inadequate government funding and low enrolment
D. Competition with private pension schemes
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Which of the following is one of the recommendations made by the Parliamentary Standing Committee (PSC) to improve PM-SMY?
A. Increase the monthly premium
B. Extend eligibility to workers aged 50 years
C. Merge PM-SMY with Atal Pension Yojana (APY)
D. Eliminate government contributions
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