Explained: The Modi government’s pension scheme for informal workers

While presenting the interim Budget for 2019-2020, acting Finance Minister Piyush Goyal announced an unprecedented pension scheme for workers in the informal economy- which roughly constitute 81% of India's workforce, according to the International Labour Organisation.

The scheme, which is called Shram Yogi Mandhan, offers labourers a form of social security that has so far eluded them.

Who qualifies for the scheme?

All workers in the informal sector that earn less than ₹15,000 a month. Around 100 million people are expected to benefit from the scheme.

How much will workers get?

Workers above the age of 60 will now receive a monthly pension of ₹3000.

How much will workers contribute?

The government is counting on informal workers between the ages of 29 and 60 to make a contribution of ₹100 a month, an amount that it says will be equally matched. If worker enrols in the scheme from the age of 18 years onwards, he/she will only have to contribute ₹55 on a monthly basis.

How much will the government spend?

The government has earmarked an allocation of ₹5 billion for the scheme. It will deposit equal contributions in the pension account of workers every month, who will probably enrol in the scheme through Aadhaar.

When will the scheme be implemented?

The pension scheme will be implemented in the coming fiscal year. Additional funding will be released as per requirements.

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