Government plans to make social security scheme for informal workers more attractive

The government is looking to make its flagship social security scheme for informal workers more attractive by offering a free accident cover or slashing the monthly contribution amount as new enrolments have slumped to an all-time low.

A top official said the government is considering various options to attract more informal workers to join the voluntary Pradhan Mantri Shram Yogi Maandhan (PM-SYM) pension scheme.

‘We are contemplating some incentives while also scaling up publicity to raise awareness about the scheme,’ the official told ET.

‘We are analysing the near stagnation in enrolments and all efforts will be made to push up the numbers as this is the flagship scheme for unorganised workers,’ the person said.

Enrolments under the scheme in the first five months of this fiscal year till August 31 stood at 16,531, or just 3,306 per month, down from an average of 10,843 enrolments per month last fiscal and 115,000 per month in FY20. The official said the recent slide in enrolments could be an impact of Covid-19.

Cumulatively, 4.51 million informal workers have joined PM-SYM scheme since its launch in 2018-19. That is just over 1% of the country’s total informal workforce estimated at over 380 million.

PM-SYM is a voluntary contributory pension scheme that caters to unorganised sector workers in the 18-40 age group and earning less than Rs 15,000 per month.

Under it, workers pay a monthly contribution of between Rs 55 and Rs 200 and a matching contribution is offered by the government. This makes them entitlement to a monthly pension of Rs 3,000 once they reach the age of 60.

The government is hopeful that the number of monthly enrolments may turn around as the economy picks up pace and work gets in full swing in industrial towns in coming months.

The two waves of the pandemic in 2020 and 2021 have hit the lives and livelihood of millions of workers who were forced to move back to rural India, either due to loss of jobs or industrial shutdown following the outbreak of Covid-19.