Pradhan Mantri Shram Yogi Maandhan Yojana
Context
Recently, the Parliamentary Standing Committee (PSC) raised concerns over the underperformance of the Pradhan Mantri Shram Yogi Maandhan Yojana (PM-SMY).
- The report highlighted the scheme issues like low enrolment, reduced funding, and structural challenges.
Relevance:
GS-02 (Government schemes)
About the Pradhan Mantri Shram Yogi Maandhan Yojana:
- The PM-SMY is a central sector pension scheme under the Ministry of Labour and Employment.
- It was launched in 2019 to provide financial security to unorganised workers.
- The Life Insurance Corporation of India (LIC) acts as the pension fund manager.
- The scheme is aimed at unorganised workers aged 18 to 40, including street vendors, domestic workers, construction labourers, and agricultural workers, earning up to ₹15,000 per month.
- Workers contribute monthly premiums ranging from ₹55 to ₹200, depending on their age of entry, with the government matching their contribution.
- Pension Benefits: After turning 60, subscribers receive a pension of ₹3,000 per month. In the event of the subscriber’s death, the spouse gets 50% of the pension as a family pension. However, no lump-sum payment is provided if the subscriber dies before 60.
Highlights of the PSC Report on PM-SMY
- Underperformance: The scheme aimed to cover 100 million workers by 2023 but enrolled only 5 million by FY 2024, reaching less than 1% of the 565 million unorganised workforce.
- Declining Contributions: Government funding dropped from ₹324.23 crore in FY 2021-22 to ₹162.51 crore in FY 2023-24, reflecting reduced participation and interest.
- Key Challenges: Irregular income, the pandemic’s financial impact, insufficient documentation, low awareness, and confusion due to overlapping pension schemes hindered enrolment.
- Proposed Reforms: Expand the eligibility age to 50 years, merge PM-SMY with similar schemes, and integrate it with the e-Shram portal for wider coverage.
- Support Measures: Introduce Direct Benefit Transfers (DBT) for unaffordable premiums and conduct awareness campaigns to improve understanding of the scheme.
- Future Plans: The government has extended the scheme until 2025-26, aiming to address its issues and enhance its appeal.
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