Pension and Income Transfer Schemes: Gross insult to the workers and peasants

The BJP-led Government has used the occasion of the Interim Budget for 2019-20 to announce two new schemes. A close examination of these schemes shows that their aim is not what is officially stated. Far from addressing the problems affecting workers and peasants, the aim of these schemes is to rob workers further and pacify the peasants by throwing some crumbs from the massive amounts looted from them.

The BJP-led Government has used the occasion of the Interim Budget for 2019-20 to announce two new schemes. One is a pension scheme targeted at workers who do not have regular jobs. The other is an income transfer scheme targeted at peasants who own less than five acres of land.

A close examination of these schemes shows that their aim is not what is officially stated. Far from addressing the problems affecting workers and peasants, the aim of these schemes is to rob workers further and pacify the peasants by throwing some crumbs from the massive amounts looted from them.

Pension Scheme

The Pradhan Mantri Shram Yogi Mandhan is a contributory pension scheme targeted at workers in “unorganised sectors”. In his budget speech, the Finance Minister referred, in particular, to street vendors, rickshaw pullers, construction workers, rag pickers, agricultural workers, beedi workers and those employed in handloom, leather and other similar occupations. Any such worker who is 18-40 years old, with monthly income less than Rs. 15,000, is eligible to join the scheme.

Upon joining this scheme, a worker has to start making monthly contributions, whose amount depends on his or her age at the time of joining the scheme. The monthly contribution would be Rs. 55 for a worker who is 18 years old. It would be Rs. 100 for one who is 29 years old; and Rs. 200 for a 40 year old. The Government of India woulo contribute an equal amount every month to the pension fund. The worker can start drawing a pension of Rs. 3000 per month upon completing 60 years of age.

This proposed pension scheme is being touted as the world’s largest pension scheme. It is being said that 10 crore (100 million) workers can potentially benefit from this scheme. This is nothing but an empty boast.

There are many good reasons why young workers will not want to join this scheme. Workers who ars 30 years old today will have to keep contributing for another 30 years before drawing any benefit from the scheme. The pension they would receive has no relation to the income they may be enjoying just before retirement. The fixed amount of Rs. 3000 wouly be worth very little by the time they retire. Assuming annual inflation of 7%, 30 years from now, Rs. 3000 will purchase only Rs. 400 worth of goods at today’s prices. For a 20 year old worker, who will start getting Rs. 3000 only after 40 years, it will be worth only Rs.200 at today’s prices.

The average life expectancy of workers with irregular jobs in our country is only about 60. This means that about half of them will not even be alive to draw any benefit from this scheme! Even those who live till 65 or 70 will find that more has been taken out from them than what they get back as pension. Workers above 40 years of age could have derived some benefit, but they have been left out of the scheme.

Similar schemes have been announced before. None of them have ever achieved anything close to the bombastic estimates of enrolment made at the time they were launched. For instance, the Atal Pension Yojana was launched on 9th May , 2015, with a target of covering 2.2 crore (22 million) workers by December 2015. Only about 6.5% of this target was achieved by that date. Less than half that target has been reached even after three and a half years.

Workers are demanding a living wage, with a minimum wage of Rs. 18000 for unskilled labour. They are demanding annual cost of living adjustments. They are demanding a pension that would enable them to live with dignity in their old age.

The proposed pension scheme not only fails to fulfil the just demands of workers. It is actually aimed at robbing poor workers and generating a fund with state support which, at a future date, can be converted into finance capital available for the Tatas, Ambanis, Birlas and other monopoly houses to play with.


The Pradhan Mantri Kisan Samman Nidhi (called PM-KISAN) is an income transfer scheme targeted at peasant farmers who cultivate plots of less than two hectares (roughly equal to five acres). According to official date there are 12 crore such small plots being cultivated. A sum of Rs. 2000 is being planned to be transferred to the bank accounts of small plot owners on or before 31st March, 2019. This initial tranche is for the period of four months, starting December 2018.

The scheme is unlikely to reach all 12 crore cultivators of small plots because not all of them own the plots they cultivate. The scheme excludes tenant farmers. It also excludee peasants who do not have clear title deeds. Those who are able to furnish acceptable proof of ownership of land, of not more than two hectares, are entitled to receive Rs. 6000 in a full year, in three instalments of Rs. 2000 each. An equal amount is to be transferred to all peasants who join the scheme, irrespective of how much they produce.

Peasants are demanding reliable supply of electricity, water for irrigation, seeds and other inputs at affordable rices. They are demanding a fair price for their produce, at least 50% more than their cost of production. Government of India is not willing to fulfil these just demands. Instead, it is offering a flat amount of Rs. 500 per month, which is nothing compared to the losses which peasanty are suffering.

Instead of taking steps to prevent peasants from being robbed by private traders and capitalist trading companies, the State is offering a dole. Instead of respecting and protecting the rights of those who till the land, the State is treating them like beggarssa Peasants will continue tr bg robbed in the market place by private companies, while the State doles out a meagre amount in the name of income support.


The ruling capitalist class and its parties have no solution to the problem of providing work, secure livelihood and post-retirement support for all. The BJP hopes to gain some votes by fooling some workers and throwing crumbs to poor peasants. Congress Party is pretending to be a champion of the interests of workers and peasants, promising to solve their problems if voted back to power.

Both the BJP and the Congress Party are committed to continue with the program of globalisation, through liberalisation and privatisation. It is a program aimed at guaranteeing maximum profits for Indian and foreign monopoly companies, at the expense of the livelihood and rights of workers and peasants.

The solution to the problem requires a new orientation and motivation for social production. Social production must be organised according to a scientific plan, oriented to fulfil human needs, instead of being chaotic and motivated by capitalist greed for maximum private profits. Everyone should have the opportunity to contribute to social production, to be remunerated according to work done, and receive a decent pension after retirement. Under such a system, nobody will be able to become super-rich. However, every member of society will be guaranteed the conditions required for a dignified human life. Society as a whole will get enriched. Living standards of all individual families will be raised to a human level, and then improve steadily, with no interruptions and crises.

The establishment of such a new orientation for social production requires the collective effort of workers, peasants, other toiling people and progressive intellectuals. We who produce the wealth of India have to become her master. The decisions about what and how much should be produced and how they get distributed must be taken out of the hands of competing private interests headed by monopoly capitalist corporations. Decision-making power must be brought into the hands of the working people. We have to wage our day-to-day struggles with this aim in mind.

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