Pension may be linked with inflation index: Govt

Old age pension is likely to be linked with inflation index on the pattern of MNREGA besides being made universal by doing away with above poverty line and below poverty line criteria, the government informed Rajya Sabha on Thursday.

The government is also contemplating amendments to other two pension schemes to make widows eligible for it at 18 years instead of present age cap of 40, and disabled with 40 per cent disability qualify for it instead of 80 per cent.

"Government has reached a broad consensus on the issue after two rounds of talks with Pension Parishad.

"Elderly people from different states are staging dharna at Jantar Mantar for universalisation of pension scheme.

The prime minister has asked me to talk to them. . .An agreement is likely in the next three to four months," Rural Development Minister Jairam Ramesh said.

Ramesh was responding to members' concern over dharna by the elderly people, who are demanding increase in the pension to Rs 2,000 a month from Rs 200 at present.

Informing members that it will be made Rs 300 per month, Ramesh said, "I agree that today Rs 300 a month is nothing and it should be increased. It should be linked to inflation as in case of MNREGA.

"I will speak to the Finance Minister and Prime Minister," Ramesh said.

He said the government was implementing three pension schemes at present -- Rs 200 a month for the elderly, Rs 300 a month for the widows and Rs 300 a month for the disabled -- and as a first step all these three should be made Rs 300 a month.

"While the government spent Rs 8,400 crore (Rs 84 billion) in 2012-13 on pensions, it plans to spend Rs 9,400 crore (Rs 94 billion) in 2013-14," Ramesh said, regretting that barely four or five states like Odisha, Andhra Pradesh and Tamil Nadu were disbursing the pension amount every month while others distributed the same once in seven or eight months.

"This is a very important issue. . . pension distribution system needs to be changed," Ramesh stressed.

Illustration: Uttam Ghosh/Rediff.com