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Old-age pension scheme launched
July 15, 2003
Prime Minister, Atal Behari Vajpayee, presenting a policy to a senior
citizen at the launch of a Special Pension and Health Insurance Scheme for
Senior Citizens in New Delhi on Monday. The Finance Minister, Jaswant
Singh, is also seen.
NEW DELHI - The Government yesterday amended the old-age pension
scheme at the launch function itself to permit premature withdrawal of the
amount after 15 years.
Also, after three years, a pension policy-holder can avail of a
loan from the Life Insurance Corporation to the extent of 75 per cent of
the premium amount for which the interest would be 8.5 per cent per annum
for now. The interest rate would be revised periodically.
These two amendments were announced by the Finance Minister,
Jaswant Singh, just before the Prime Minister, Atal Behari Vajpayee,
handed over policy documents to some of the beneficiaries.
Mr. Vajpayee also formally launched the universal health insurance
scheme which would provide medical cover to specified beneficiaries.
The old-age pension scheme of the LIC, called the Varistha Pension
Bima Yojana, will provide a minimum pension of Rs. 250 a month and a
maximum of Rs. 2,000 a month to people over 55 years of age who opt for
For the minimum pension, a lump sum payment of Rs. 33,335 has to be
made while for the Rs. 2,000 scheme, Rs. 2,66,665 has to paid (the figure
has been revised downwards from the earlier amount of Rs. 2,77,490). There
is no upper age limit for availing of the scheme and in the event of the
death of the pensioner, the purchase price will be returned to the
The assured rate of return worked out by the LIC is nine per cent
per annum. In case the LIC earns lower returns on the corpus of the
scheme, the Government would step in to make up the shortfall.
The universal health insurance scheme, which would be
community-based involving a minimum of 100 families, envisages a premium
of Re. 1 a day for an individual, Rs. 1.50 a day for a family of five and
Rs. 2 for a family of seven. Against this, medical cover of up to Rs.
30,000 towards hospitalisation would be provided and in case of death due
to accident, compensation up to Rs. 25,000 would be given. Additionally,
compensation due to loss of earning would be provided at the rate of Rs.
50 a day up to a maximum of 15 days.
For below the poverty line families, the Government will provide Rs.
100 per annum towards their annual premium.
During the launch ceremony, Mr. Vajpayee said the need for old-age
pension came about because of the changed environment in the country.
"Earlier we had families where the aged and the elderly were looked
after by other family members. Today, because of economic reasons, this
has become difficult and the Government felt the need to step in with the
old-age pension scheme," he said.
Mr. Vajpayee said that the pension and the health insurance schemes
were part of the Government's `Antodaya' efforts of reaching out to the
poorest of the poor. "Under Antodaya, we have made available
foodgrain at very cheap prices. There is no shortage of food in the
country. Even so, if there are reports of starvation deaths, it is because
we could not reach out to them. The delivery system has to be
He appreciated the early implementation of the two schemes announced by Jaswant Singh in the budget in February this year. "Earlier, schemes were announced in the budget and by the time the next budget came, these announcements disappeared or were renamed. This time, the implementation has been early and it remains to be seen how the authorities make these schemes successful by reaching out to the people."