In an attempt that could help UPA 2 tide over the anti-incumbency factor and yield political dividends in 2014, the rural development ministry is proposing to cover 60 lakh additional below-poverty-line (BPL) people under its pension schemes.
The proposals, including enhanced pension payouts, would cost the central exchequer an additional R9,500 crore.
The recommendations of a committee under the ministry, if accepted, would add to the 260 lakh beneficiaries already covered under the widow, disability and old age pension schemes.
The extended coverage would be made possible by altering the criteria under which beneficiaries are selected now. For example, the Indira Gandhi National Widow Pension Scheme covers widows more than 40 years old.
Under the proposal, the minimum eligibility age would be 18 years only. In addition, pension payouts would be given to single, abandoned and separated women.
Under the disability pension proposal, BPL people with 40% disability would be covered. At present, only people with 80% disability are covered.
Also proposed is the enhancement of pension to Rs. 1,000 per month for severely disabled and Rs. 500 per month for 40% disability.
Currently, old age pension is Rs. 200 per month and widow and disability pensions are Rs. 300 per month. Most states add their contribution to the central pensions and disburse to the poor.
Rural development minister Jairam Ramesh, who has been favouring a wider, inclusive coverage, told HT the recommendations would be sent to the finance ministry this week.
The ministry, meanwhile, is putting in place a mechanism to disburse monthly pensions directly to beneficiaries' accounts using Aadhar numbers. A fund at the state level is proposed for the purpose.
The rural ministry is positive that the proposals, or a majority of them, would make their way in budget 2013 — the last regular one before the 2014 elections. The Union budget for the next financial year is being viewed as the last big opportunity for the government to expand its socio-economic outreach programmes.
In the meeting of council of ministers held by the PM after the recent reshuffle, finance minister P Chidambaram highlighted the need for reforms for fiscal strength and assured a "good budget" in return.
With the decennial BPL census pending, the committee headed by additional secretary SM Vijayanand also proposed automatic inclusion of BPL people under pension schemes. The proposal, which would pay Rs. 300 per month to 50 lakh additional beneficiaries, would itself cost Rs. 1,800 crore per annum.