Why in News
  • A recent evaluation study commissioned by the Union Ministry of Rural Development has found that the Centre’s fixed old age pension under NSAP has been significantly eroded due to inflation.
  • The study highlights that the central contribution of ₹200–₹500 per month under the National Social Assistance Programme (NSAP) has remained unchanged since 2012.
  • It states that the real value of pensions has declined by nearly 45%, reducing the purchasing power of beneficiaries.
  • The report is titled:
    • “Impact Assessment and Evaluation of the National Social Assistance Programme (NSAP)”
  • The study was conducted by:
    • Academy of Management Studies (AMS), a Delhi-based research and consulting firm
  • It covered multiple states including:
    • Assam, Andhra Pradesh, Telangana, Uttar Pradesh, Bihar, Haryana, Gujarat, Jammu & Kashmir, Tamil Nadu, and Chhattisgarh

KEY FINDINGS OF THE STUDY

Impact of Inflation on Pension Value
  • The study found that inflation has significantly reduced the real value of fixed cash transfers under NSAP.
  • It stated that:
    • ₹200 pension in 2012 would now need to be around ₹353 to maintain the same purchasing power.
  • It further noted that:
    • With CPI rising from 100 (2012) to 191 (2024), there has been a 91% cumulative increase in prices.
  • Accordingly, pension amounts should have been revised to:
    • ₹382 instead of ₹200
    • ₹955 instead of ₹500

Erosion of Real Value :

  • The study highlighted that:
    • Average inflation of around 5% annually (2010–2024) has reduced the value of fixed pensions.
  • It concluded that:
    • The real value of central pension support has fallen by nearly 45%.
  • It also noted that:
    • There has been no revision in pension amounts since 2012, despite rising consumption expenditure.

Economic Context :

  • The study observed that:
    • India has made rapid economic progress in recent years.
    • India has become the 4th largest economy in the world.
  • However, it stated that:
    • Social security support has not kept pace with economic growth and inflation trends.

ABOUT NSAP

About NSAP
  • The National Social Assistance Programme (NSAP) was launched in 1995.
  • It is a central sector social welfare scheme aimed at providing financial assistance to vulnerable groups.
  • It covers:
    • Elderly persons
    • Widows
    • Persons with disabilities
    • Poor families
SCHEMES UNDER NSAP NSAP currently includes five major schemes:
  • Indira Gandhi National Old Age Pension Scheme (IGNOAPS)
  • Indira Gandhi National Widow Pension Scheme (IGNWPS)
  • Indira Gandhi National Disability Pension Scheme (IGNDPS)
  • National Family Benefit Scheme (NFBS)
  • Annapurna Scheme

DETAILS OF MAJOR SCHEMES

Indira Gandhi National Old Age Pension Scheme (IGNOAPS)
  • Under IGNOAPS, the Centre provides:
    • ₹200 per month to individuals aged 60–79 years
    • ₹500 per month to individuals aged 80 years and above
  • The study reports that more than:
    • 221 lakh beneficiaries are currently covered

Indira Gandhi National Widow Pension Scheme (IGNWPS) :

  • Under IGNWPS, the Centre provides:
    • ₹300 per month to widows aged 40–79 years
    • ₹500 per month to widows aged 80 years and above
  • The study states that more than:
    • 67 lakh beneficiaries are covered

Indira Gandhi National Disability Pension Scheme (IGNDPS) :

  • Under this scheme, financial assistance is provided as:
    • ₹300 per month to persons with severe or multiple disabilities (18–79 years)
    • ₹500 per month to beneficiaries aged 80 years and above
  • The study notes that more than:
    • 8.8 lakh beneficiaries are covered

National Family Benefit Scheme (NFBS) :

  • Under NFBS, a one-time assistance of:
    • ₹20,000 is provided
  • It is given to families in case of death of a primary breadwinner aged 18–59 years.
  • The study recommends that:
    • The amount should be revised to approximately ₹38,200 (nearly ₹40,000)

Annapurna Scheme :

  • Under the Annapurna Scheme, eligible senior citizens who are not receiving pensions are provided:
    • 10 kg of food grains per month free of cost
  • This ensures food security for uncovered elderly beneficiaries.

REGIONAL PERFORMANCE & OUTCOMES

  • The study observed that states providing higher top-ups to central pensions showed:
    • Better income stability
    • Improved well-being of beneficiaries
  • Such states include:
    • Andhra Pradesh
    • Telangana
    • Haryana
  • It concluded that state-level supplementation improves the effectiveness of NSAP.

KEY RECOMMENDATIONS

National Floor Pension (NFP)
  • The study recommended the introduction of a National Floor Pension (NFP) similar to the:
    • National Floor Level Minimum Wage
  • The objective is to ensure:
    • A minimum guaranteed pension across all states

Inflation Indexation :

  • The study recommended that the NFP should be linked to the Consumer Price Index (CPI).
  • This would ensure:
    • Automatic adjustment with inflation
    • Annual revision based on cost of living

State Top-Ups :

  • The study recommended that states should:
    • Provide additional top-ups over the central pension
    • Follow a uniform and transparent mechanism
  • This would help reduce:
    • Regional disparities in pension benefits