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Goyal also announced hiking of tax free gratuity to Rs 30 lakh from existing Rs 20 lakh for employees having service of more than five years.
The government on Friday announced a new scheme to provide unorganised workers with up to Rs 15,000 monthly income an assured pension of Rs 3,000 per month after 60 years of age.
The plan is expected to provide social security to 10 crore labourers.
This will attract matching contribution of Rs 100 per month from government as well as from the workers.
Presenting the Interim Budget 2019-20 in the Lok Sabha, Fiance Minister Piyush Goyal said, "Half of India's GDP comes from the sweat and toil of 42 crore workers in the unorganised sector working as street vendors, rickshaw pullers, construction workers... and in numerous other similar occupations. Domestic workers are also engaged in big numbers. We must provide them comprehensive social security coverage for their old age.”
The government proposes to launch a mega pension yojana namely 'Pradhan Mantri Shram-Yogi Maandhan' (PMSYM) for the unorganised sector workers with monthly income up to Rs 15,000, he said.
He further explained that this pension scheme will provide them (informal sector workers) an assured monthly pension of Rs 3,000 from the age of 60 years on a monthly contribution of a small affordable amount during their working age.
According to the scheme, an unorganised sector worker joining the pension scheme at the age of 29 years will have to contribute only Rs 100 per month till the age of 60 years.
The scheme provides that an informal sector worker joining the scheme at 18 years, will have to contribute Rs 55 per month.
The government will deposit equal matching share in the pension account of the worker every month.
The minister informed that it is expected that at least 10 crore labourers and workers in the unorganised sector will avail the benefit of 'Pradhan Mantri Shram-Yogi Maandhan' within next five years, making it one of the largest pension schemes of the world.
The government has provided Rs 500 crore for the scheme and assured that additional funds will be allocated as needed.
The scheme will also be implemented from the current year.
About the gratuity, the minister said the ceiling of payment of tax free gratuity has been enhanced from Rs 10 lakhs to Rs 20 lakhs (last year in March).
All those employees who serve for more than five years are eligible for payment of gratuity on leaving the job or at the time of retirement.
Listing other achievement of the government, he said, "The New Pension Scheme (NPS) has been liberalised. Keeping the contribution of the employee at 10 pe cent, we have increased the Government contribution by 4 per cent making it 14 per cent."
Maximum ceiling of the bonus given to the labourers has been increased from Rs 3,500 per month to Rs 7,000 per month and the maximum ceiling of the pay has been increased from Rs 10,000 per month to Rs 21,000 per month, he said.
During the last five years the minimum wages of labourers of the all categories have been increased by 42 per cent, which is the highest ever.
The ceiling of ESI's eligibility cover has been increased from Rs 15,000 per month to Rs 21,000 per month.
Minimum pension for every labourer has been fixed at Rs 1,000 per month.
In the event of death of a labourer during service, the amount to be paid by the EPFO has been enhanced from Rs 250,000 to Rs 600,000.
Under Anganwadi and Asha Yojana honorarium has been enhanced by about 50 per cent for all categories of workers, the minister informed the House.
About job creation, he said, high growth and formalistation of the economy has led to the expansion of employment opportunities as shown in EPFO membership, which has increased by nearly 2 crore in two years reflecting formalisation of the economy and job creations.
Photograph: Shannon Stapleton/Reuters