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All about Pension scheme introduced in Interim Budget 2019-20 for the workers of unorganised sector


Last interim budget of the current ruling government was presented on 01st of Feb 2019, the main concentration was on the worker or economically weaker sector people of economy. But the benefits launched for the workers were the highlight of the budget.

In the budget, the following are the key changes made in  favour of the workers:
1.    Increased wage limit to Rs. 7,000 per annum in comparison to previous Rs. 3,500.

2.    Eligibility limit of salary to qualify for statutory bonus increased to Rs. 21,000 per month instead of the earlier limit of Rs. 10,000.

3.  government had also increased the exemption limit of gratuity receipt by the workers, Exemption limit is now of Rs. 30 Lakh in comparison to the earlier exemption limit of Rs. 10 Lakh only.

4.    Government announced the Pradhan Mantri Shram-Yogi Maandhan Yojana- A pension scheme for the workers of unorganised sector workers.

Let’s discuss what is the upcoming pension scheme and how it is going to benefit the workers and economically weaker section of our society.

Normally people working in Government or organised sector does not have to worry about their retirement plan, as they have generally planned the same but for the peoples of economically weaker section (Unorganised Sector workers) Labours who are struggling to earn their basic livelihood, for them it is not even possible to think about their Retirement plan.

Resultant once they growing old, most of them become fully dependent on their child  or forced to work in their old ages.

The Central government come out with the pension scheme, which guarantees a minimum pension after attaining the age of 60 Years. This scheme is named Pradhan Mantri Shram-Yogi Maandhan Yojana (PMSMY).

The primary objective of this scheme is to cover the labours who are associated with the unorganised sectors.

The PMSMY is meant to cover the workers with the income upto Rs. 15,000 per month and monthly contribution would be lies between Rs. 55 per month to Rs. 100 per month, further it gives assurance to pay minimum pension amount of Rs. 3,000 per month.

Contribution amount chart

Contribution Per month
Pension Amount per Month
18 Years
Rs. 55
Rs. 3,000
29 Years
Rs. 100
Rs. 3,000

The Government will make a monthly contribution of a similar amount to the pension account of the worker.

The PMSMY scheme is going to be implemented from the current year only and requires a lot of fund, so the government of India already allocated Rs. 500 Crore and its purposed additional fund will be allocated on the need basis.

The Government has proposed that it is going to benefits the 10 Crores workers in the next five Years.

What are the Eligibility Criteria

A. As per the notification, this Scheme shall apply to the unorganised workers who are working or engaged as home- based workers, street vendors, mid-day meal workers, head loaders, brick kiln workers, cobblers, rag pickers, domestic workers, washer men, rickshaw pullers, landless labourers, own account workers, agricultural workers, construction workers, beedi workers, handloom workers, leather workers, audio- visual workers and similar other occupations. 

B. Monthly Income of Worker Should not exceeds Rs. 15,000.

C. Must having Aaddhar Card & Saving Bank account

D. Age of worker must be above 18 years but maximum 40 Years only.

E. Worker is not eligible if he already member of others pension scheme where contribution is also made by the Central Government or Employee State Insurance Corporation Scheme or Employee Provident Fund or he is an income tax assesse.

Government Contribution towards the Scheme
PM-SYM is a voluntary and contributory pension scheme on a 50:50 basis where prescribed age-specific contribution shall be made by the beneficiary and the matching contribution by the Central Government as per the chart. For example, if a person enters the scheme at the age of 29 years, he is required to contribute Rs 100/ - per month till the age of 60 years an equal amount of Rs 100/- will be contributed by the Central Government.

Enrolment process for the Scheme

The subscriber will be required to have a mobile phone, savings bank account and Aadhaar number. The eligible subscriber may visit the nearest Common Services Centres (CSC eGovernance Services India Limited (CSC SPV)) and get enrolled for PM-SYM using Aadhaar number and savings bank account/ Jan-Dhan the account number on self-certification basis. 
Later, facility will be provided where the subscriber can also visit the PM-SYM web portal or can download the mobile app and self-register using Aadhar number/ savings bank account/ Jan-Dhan account number on a self-certification basis.

Exit and Withdrawal process:

Exit provisions are as under

(i)  In case subscriber exits the scheme within a period of less than 10 years, the beneficiary’s share of contribution only will be returned to him with savings bank interest rate.

(ii)  If subscriber exits after a period of 10 years or more but before superannuation age i.e. 60 years of age, the beneficiary’s share of contribution along with accumulated interest as actually earned by fund or at the savings bank interest rate whichever is higher.

(iii)  If a beneficiary has given regular contributions and died due to any cause, his/ her spouse will be entitled to continue the scheme subsequently by payment of regular contribution or exit by receiving the beneficiary’s contribution along with accumulated interest as actually earned by fund or at the savings bank interest rate whichever is higher. 

(iv)  If a beneficiary has given regular contributions and becomes permanently disabled due to any cause before the superannuation age, i.e. 60 years, and unable to continue to contribute under the scheme, his/ her spouse will be entitled to continue the scheme subsequently by payment of regular contribution or exit the scheme by receiving the beneficiary’s contribution with interest as actually earned by fund or at the savings bank interest rate whichever is higher. 

(v)  After the death of subscriber as well as his/her spouse, the entire corpus will be credited back to the fund.

(vi)  Any other exit provision, as may be decided by the Government on advice of NSSB.

Online enrolment here

Click Here

For Other details & clarification

customer care number 1800 267 6888

Source Labour Ministry Notification dated February 7, 2019

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