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EPS for Low-Wage Employees Not Consistent With Human Dignity: EAS writes to FM

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(EAS Sarma)

One of the sections of the people who seem to be in a helpless situation today in the context of the Covid19 crisis is that of 60 lakh pensioners under the EPS-95 managed by the Employees Provident Fund Organisation (EPFO).

Out of this, 40 lakhs are getting less than Rs 1,500 per month and many getting less than Rs 1,000 per month.

I understand that the minimum pension of Rs 1,000 has remained stagnant for more than five years, though the cost of living has increased steeply.

This is the section that is vulnerable to increasing health problems. The situation in which they find themselves today is truly pitiable, calling for a review of the funding of the scheme and the need to entitle the pensioners to a minimum that is consistent with the right to live under Article 21 of the Constitution.

EPS-95 is partly funded by employees’ contributions. Therefore, a large portion of the minimum pension of Rs 1,000 is actually funded by the pensioner-employee himself/ herself.

To that extent, it is a saving scheme. The difference between what the employee has contributed and what the employee on retirement should get to be able to live in dignity should be funded by the employer and the Government as a measure of social security.

Some economists feel that the pension should at least be half of the minimum wage. Whatever be the principle, the amount of the pension should enable the pensioner to lead a dignified life.

 

EAS Sarma

There have been several expert committee reports on the subject and at least one Parliamentary Committee report.

In fact the Rajya Sabha Committee on Petitions in its 147th Report dated 3-9-2013 considered a petition filed by Shri Prakash Javadekar (at present a Union Minister), then a Member of the Rajya Sabha seeking an amendment to the EPS-95 and recommended that the minimum pension should be enhanced to Rs 3,000 per month and indexed to the cost of living.

Even based on this, the government should enhance the pension by adjusting Rs 3,000 in line with the increase in the cost of living since September 2013 and adopt the approach recommended by that Committee hereafter.

On the basis of a pension linked to the minimum wage level and other cost-of-living arguments, the trade unions have been demanding a minimum pension of Rs 6,500 indexed to the cost of living and entitling the pensioners to ESI benefits to offset the increasing health costs.

Perhaps, there is a strong case to consider that demand as it is meant to provide a social security cover to the aging pensioners. In any progressive society, the government has the obligation to accord the highest priority to such social security measures.

In any case, this is a matter on which the government cannot afford to delay its decision any further. I hope that your Ministry, in consultation with the Union Labour Ministry, takes an urgent decision to enhance the minimum pension as indicated above.

(Full text of the letter EAS Sarma has written to union finance minister Nirmala Sitharaman on Tuesday)

(E A S Sarma, Former Secretary to GOI, Visakhapatnam)