India: Old-age pension scheme launched

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India: Old-age pension scheme launched

Hindu

July 15, 2003

The 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 the scheme.

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 nominee.

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 strengthened."

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."