OLD AGE PENSION UNDER NSAP

OLD AGE PENSION UNDER NSAP

Why in News

• A recent evaluation study commissioned by the Union Ministry of Rural Development has found that the Centre’s fixed old age pension under NSAP has been significantly eroded due to inflation.
• The study highlights that the central contribution of ₹200–₹500 per month under the National Social Assistance Programme (NSAP) has remained unchanged since 2012.
• It states that the real value of pensions has declined by nearly 45%, reducing the purchasing power of beneficiaries.
• The report is titled:
  • “Impact Assessment and Evaluation of the National Social Assistance Programme (NSAP)”
• The study was conducted by:
  • Academy of Management Studies (AMS), a Delhi-based research and consulting firm
• It covered multiple states including:
  • Assam, Andhra Pradesh, Telangana, Uttar Pradesh, Bihar, Haryana, Gujarat, Jammu & Kashmir, Tamil Nadu, and Chhattisgarh

KEY FINDINGS OF THE STUDY

Impact of Inflation on Pension Value

• The study found that inflation has significantly reduced the real value of fixed cash transfers under NSAP.
• It stated that:
  • ₹200 pension in 2012 would now need to be around ₹353 to maintain the same purchasing power.
• It further noted that:
  • With CPI rising from 100 (2012) to 191 (2024), there has been a 91% cumulative increase in prices.
• Accordingly, pension amounts should have been revised to:
  • ₹382 instead of ₹200
  • ₹955 instead of ₹500

Erosion of Real Value :

• The study highlighted that:
  • Average inflation of around 5% annually (2010–2024) has reduced the value of fixed pensions.
• It concluded that:
  • The real value of central pension support has fallen by nearly 45%.
• It also noted that:
  • There has been no revision in pension amounts since 2012, despite rising consumption expenditure.

Economic Context :

• The study observed that:
  • India has made rapid economic progress in recent years.
  • India has become the 4th largest economy in the world.
• However, it stated that:
  • Social security support has not kept pace with economic growth and inflation trends.

ABOUT NSAP

About NSAP

• The National Social Assistance Programme (NSAP) was launched in 1995.
• It is a central sector social welfare scheme aimed at providing financial assistance to vulnerable groups.
• It covers:
  • Elderly persons
  • Widows
  • Persons with disabilities
  • Poor families

SCHEMES UNDER NSAP

NSAP currently includes five major schemes:

• Indira Gandhi National Old Age Pension Scheme (IGNOAPS)
• Indira Gandhi National Widow Pension Scheme (IGNWPS)
• Indira Gandhi National Disability Pension Scheme (IGNDPS)
• National Family Benefit Scheme (NFBS)
• Annapurna Scheme

DETAILS OF MAJOR SCHEMES

Indira Gandhi National Old Age Pension Scheme (IGNOAPS)

• Under IGNOAPS, the Centre provides:
  • ₹200 per month to individuals aged 60–79 years
  • ₹500 per month to individuals aged 80 years and above
• The study reports that more than:
  • 221 lakh beneficiaries are currently covered

Indira Gandhi National Widow Pension Scheme (IGNWPS) :

• Under IGNWPS, the Centre provides:
  • ₹300 per month to widows aged 40–79 years
  • ₹500 per month to widows aged 80 years and above
• The study states that more than:
  • 67 lakh beneficiaries are covered

Indira Gandhi National Disability Pension Scheme (IGNDPS) :

• Under this scheme, financial assistance is provided as:
  • ₹300 per month to persons with severe or multiple disabilities (18–79 years)
  • ₹500 per month to beneficiaries aged 80 years and above
• The study notes that more than:
  • 8.8 lakh beneficiaries are covered

National Family Benefit Scheme (NFBS) :

• Under NFBS, a one-time assistance of:
  • ₹20,000 is provided
• It is given to families in case of death of a primary breadwinner aged 18–59 years.
• The study recommends that:
  • The amount should be revised to approximately ₹38,200 (nearly ₹40,000)

Annapurna Scheme :

• Under the Annapurna Scheme, eligible senior citizens who are not receiving pensions are provided:
  • 10 kg of food grains per month free of cost
• This ensures food security for uncovered elderly beneficiaries.

REGIONAL PERFORMANCE & OUTCOMES

• The study observed that states providing higher top-ups to central pensions showed:
  • Better income stability
  • Improved well-being of beneficiaries
• Such states include:
  • Andhra Pradesh
  • Telangana
  • Haryana
• It concluded that state-level supplementation improves the effectiveness of NSAP.

KEY RECOMMENDATIONS

National Floor Pension (NFP)

• The study recommended the introduction of a National Floor Pension (NFP) similar to the:
  • National Floor Level Minimum Wage
• The objective is to ensure:
  • A minimum guaranteed pension across all states

Inflation Indexation :

• The study recommended that the NFP should be linked to the Consumer Price Index (CPI).
• This would ensure:
  • Automatic adjustment with inflation
  • Annual revision based on cost of living

State Top-Ups :

• The study recommended that states should:
  • Provide additional top-ups over the central pension
  • Follow a uniform and transparent mechanism
• This would help reduce:
  • Regional disparities in pension benefits

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