BackPension enrolment in unorganized sector plunges as income dries up
July registration figures dipped to an all-time low of 12,500 amid job and income loss due to pandemicPM-SYM caters to informal workers in the 18-40 age group who earn below ₹15,000 per month
PremiumThe number of informal sector workers who sought to register for a contributory social security scheme dropped to an all-time low of just 12,500 in July. The decline came as unorganized sector workers continued to struggle to earn a living because of job loss and income loss following the coronavirus outbreak.
The July registrations are far below the monthly average of more than 100,000 workers who opted to register with the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM), a pension scheme, in the previous fiscal year.
The July figures are at the lowest since at least April 2019, for which monthly data is available and is believed to be the lowest since the scheme was unveiled in February 2019.
The July numbers are almost a 10th of what was recorded in March and less than 7% of what was recorded in February, according to labour ministry data reviewed by Mint.
The contributory pension scheme, billed as a key social security measure, caters to unorganized sector workers in the 18-40 age group and earning less than ₹15,000 per month.
Under the scheme, a worker pays a monthly contribution between ₹55 and ₹200 and a matching contribution is offered by the government.
The government has promised a ₹3,000 monthly pension once they complete 60 years.
Fresh enrolment has been considerably low since India went into lockdown in end-March, according to official data. The cumulative number registered in the last four-and-a-half months is not even 50% of the new registrations in February alone or 20% of the new registrations in October 2019, the best month since April 2019.
In February, the fresh pension registration was little above 189,000, while in October it was over 500,000. In contrast fresh enrolments were 17,000 in April, 19,000 in May, 13,900 in June and 12,560 in July.
This indicates the hardship the lower rung of the labour market is facing, said economists. Reverse migration, fear of the pandemic, and a desire to take care of the present rather than save for future in the face of uncertainties are among the reasons for the fall in the pension enrolment under the Shram Yogi Maan-dhan scheme, they said.
“Since end-March we have seen a huge displacement of informal sector workers in urban centres. Hundreds of thousands went to their villages, while those who stayed back in the big cities were struggling to make ends meet because of income loss and job loss. It was a fight between surviving and thinking for a paltry post-retirement benefit for a group of people whose earnings and cities of living are not fixed," said Arup Mitra, professor of economics at the Institute of Economic Growth in New Delhi. Mitra said other than the pandemic and its impact on their incomes, the registration problems during lockdown, and lack of a handy address and identity proof may also have contributed to the situation.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
