Unchanged since 2012, old age pension of Rs 200 eroded due to inflation: Study, Pg8

Key Highlights:

• A study commissioned by the Union Ministry of Rural Development reveals that the real value of old age pensions under the National Social Assistance Programme (NSAP) has decreased by approximately 45% due to inflation since 2012.
• The central government's contribution to monthly old age pensions has remained unchanged at Rs 200-500 per beneficiary since 2012.
• The study suggests that a pension of Rs 200 in 2012 would need to be about Rs 353 now to maintain its original purchasing power, considering the Consumer Price Index (CPI).
• The report recommends a National Floor Pension (NFP) linked to the CPI to ensure a minimum level of financial assistance across all states, with annual revisions based on the cost of living.

Detailed Insights:

• The NSAP, launched in 1995, is a social welfare scheme providing pensions to vulnerable groups like the elderly, widows, and persons with disabilities.
• The study, conducted by the Academy of Management Studies (AMS), evaluated the NSAP across ten states, including Assam, Uttar Pradesh, and Tamil Nadu.
• As of 2012, the monthly pension was Rs 200 for those aged 60-79, Rs 300 for widows and disabled persons aged 40-79 and 18-79 respectively, and Rs 500 for those aged 80 and above.
• The CPI has risen from 100 in 2012 to 191 in 2024, reflecting a 91% cumulative increase, suggesting pension amounts should have risen to Rs 382 and Rs 955 respectively.
• The study highlights that states providing higher top-ups to the central share, such as Andhra Pradesh and Haryana, demonstrated better outcomes in income stability and well-being.
• Currently, NSAP encompasses five schemes, including the Indira Gandhi National Old Age Pension Scheme (IGNOAPS) with over 221 lakh beneficiaries and the Indira Gandhi National Widow Pension Scheme (IGNWPS) with over 67 lakh beneficiaries.

Key Concepts Involved:

• National Social Assistance Programme (NSAP): A social welfare program providing financial assistance to vulnerable groups like the elderly, widows, and persons with disabilities.
• Consumer Price Index (CPI): A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.
• National Floor Pension (NFP): A proposed minimum level of financial assistance for pensions, uniformly applicable across all states and linked to the CPI for automatic inflation adjustment.