Employees Pension Scheme: Not consistent with human dignity

Pension entitlement of retiring low-wage employees of public and private sectors under the EPS Scheme not consistent with human dignity



Smt Nirmala Sitharaman

Union Finance Minister

Dear Smt Sitharaman,

Kindly refer to my letters dated 22-9-2020 & 11-3-2021 addressed to you seeking revision of pension under EPS-95 scheme to bring it in line with the necessity of enabling the pensioners to live in dignity.

No action seems to have been taken by your government in spite of the compelling arguments in favour of revising the pension and indexing it with reference to the cost of living.

At the time of moving the necessary amendments to the Employees Provident Funds & Miscellaneous Provisions Act in the Parliament in connection with EPS-95, the then Union Labour Minister, Shri M Arunachalam, on persistent demands made by the BJP members sitting in opposition, assured the House that the scheme would be subject to periodic reviews. I have enclosed here a news report that appeared at that time on the subject. It is disappointing that this Parliamentary assurance continues to remain unfulfilled till date, that too, when the same BJP has been in power for the last eight years.

I wish to point out once again that the Rajya Sabha Committee on Petitions in its 147th Report dated 3-9-2013 considered a petition filed by Shri Prakash Javadekar, then a Member of the Rajya Sabha (till recently a Union Minister in the NDA government) seeking an amendment to the EPS-95 and recommended that the minimum pension should be enhanced to Rs 3,000 per month and indexed to the cost of living. Based on this, the government should enhance the pension by adjusting Rs 3,000 in line with the increase in the cost of living since September, 2013 and adopt the approach recommended by that Committee hereafter.

On the basis of a pension linked to the minimum wage level and other cost-of-living arguments, the trade unions have been demanding a minimum pension of Rs 6,500 indexed to the cost of living and entitling the pensioners to ESI benefits to offset the increasing health costs. There is a strong case to consider that demand, as it is meant to provide a social security cover to the aging pensioners. In any progressive society, the government has the obligation to accord the highest priority to such social security measures.

In particular, the Directive Principles of the Constitution obligate the State to promote the welfare of the people, especially those who are vulnerable. Read with Article 21 (“Right to life”), this casts an obligation on the government to ensure that such vulnerable sections are fully brought under a reasonable social security cover, including a health cover.

During the first and the second waves of Covid virus and even at present when a third wave is sweeping across the country, the need for a strong social security cover for the vulnerable sections of the population, including pensioners like those covered under EPS-95, is felt like never before.

In the absence of a strong public sector healthcare system and inadequate regulation over private sector hospitals across the country, during the Covd crisis, many including the EPS-95 pensioners had to incur heavy expenses, which crippled their finances.

The usual argument put forward by the government against increasing its contribution to the EPS pension fund and enhance the pension rates is that it is fiscally unsustainable, an argument that has no force in the face of the huge tax incentives readily provided by the same government to big businesses and the extravagant expenses incurred from time to time on inessential, unproductive items of public expenditure. Considering that the items of social security cover including contribution to the EPS scheme represent more an obligation for the government than a choice, there is no other alternative for the government than to review its priorities in formulating the budget and revise the pension scheme suitably.

This is a matter on which the government cannot afford to delay its decision any longer. I hope that your Ministry, in consultation with the Union Labour Ministry, takes an urgent decision to enhance the minimum pension as indicated above.


Yours sincerely,

E A S Sarma

Former Secretary to Govt of India

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