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    Cabinet to decide on increasing minimum monthly pension to Rs 1,000 for organised sector employees

    Synopsis

    The Union Cabinet will take a final call on giving a guaranteed minimum pension of Rs 1000 per month to the 50 million organised sector employees once the finance ministry decides on how it is to be funded.

    The Union Cabinet will take a final call on giving a guaranteed minimum pension of Rs 1000 per month to the 50 million organised sector employees once the finance ministry decides on how it is to be funded.
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    NEW DELHI: The Union Cabinet will take a final call on giving a guaranteed minimum pension of Rs 1000 per month to the 50 million organised sector employees once the finance ministry decides on how it is to be funded.

    The labour ministry has given three options to the finance ministry for funding the increase which requires an enhanced contribution of 0.63% of the basic pay of employees to the pension fund, a labour ministry official told ET.

    The finance ministry could either take on the entire burden itself by contributing more or pass it on to the employees by raising eligibility age for pension from 58 years to 60 years or taking away the bonus that subscribers get after 20 years.

    Instead of placing the matter before the Central Board of Trustees, the highest decision making body of the Employee's Provident Fund Organisation, the labour ministry wants to approach the Union Cabinet for a final decision. The CBT has twice failed to take a decision on the issue as neither the employers, nor the employees wanted to share the burden.

    "Once the finance ministry makes up its mind, we will move a Cabinet note as it is an important issue that only the Union Cabinet can decide on," the official said.

    The labour ministry has been trying for long to raise the minimum pension for organised workers to Rs 1,000 per month as about 12.8 lakh pensioners of the total 35 lakh get a monthly pension lower than Rs 500. About 15 lakh pensioners get a pension ranging between Rs 500-Rs 1000, while just 7.3 lakh pensioners of the total 35 lakh get a pension higher than the fixed benchmark.

    "Most of our pensioners get a pittance every month which in some cases is as low as Rs 12. The government wants that the minimum amount should be substantial enough to make some kind of a difference in their lives," the official said.

    In order to increase minimum pension to Rs 1,000 per month, an increase to the tune of 0.63% of basic wages is required in addition to present contribution of 8.33% by employers' and 1.16% by the Centre. This would amount to Rs 539 crore, according to government calculations.

    Employee representatives, who want the government to fund the entire amount, are opposed to the options of sacrificing the bonus they get if they remain a subscriber for 20 years and allowing eligibility age for pension to be raised from 58 years to 60 years.

    "We have already rejected the two proposals at the CBT meeting as it would amount to workers funding the entire increase in minimum pension. We are not aware of the labour ministry making any proposal to the finance ministry, but we stick to our initial stand," B L Todi from the Bhartiya Mazdoor Sangh told ET.
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    8 Comments on this Story

    S.Kumar2829 days ago
    It can not be foretold how much time Cabinet & Finance Ministry will take in recommending Rs.1000/- p.m. pension to the EFP members, many of whom are getting pension as less as Rs.12/- as per information.
    thairavi 2998 days ago
    Is there any pension scheme for jobless persons like housewives, free-lancers, domestic helps, etc.?
    Manbas Khan2999 days ago
    And I was thinking to give at least R$.36,000 in pension to each retiree, R$.36,000 (plus R$.1000 for each additional child) to single mothers, and R$24,000 (R$12,000 to parents and R$12,000 into and educational fund) for each girl child when I become PM of India.
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