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Red tapism mars pension plan for the unorganised

Delay in notification process hinders Board’s work

THE plan to include unorganised sector workers in the National Pension Scheme (NPS) has been hobbed by red tapism. Conceived by the newly formed Karnataka State Unorganised Workers Social Security Board (KUWSSB) under Labour department, the Board itself is awaiting notification from the State Government to allow it to start registering workers and then enroll them in the pension scheme.

While KUWSSB got Government approval in 2008 and the Board was formally set up in November 2009, it has not been able to either register workers or registering officers yet.

The Board does not even know the number of unorganised workers in the State.
Officials in the Board claim that while State is the first in the country to have such a Board, the notification process is taking time, let alone have separate building or people to work in the Board.

Pension scheme
For starters, six sectors have been selected namely tailor, washermen, headload workers, hotel workers, automobile workshops and auto, taxi, bus and truck drivers and conductors.

According to Joint Labour Commissioner and KUWSSB Joint Secretary, Narasimha Murthy, the reason for selecting these sectors is because one can identify the employers.  The workers registered under the Board will become automatic subscribers to the scheme, where he/she will pay premium of Rs 100 every month.

To complement this amount, State government will put in Rs 1,200 per worker per year and the Union government will put in Rs 1,000 per worker after 10 months of opening the pension account.

As a result, a worker will have Rs 3,400 in his account every year and he would be able to avail the pension of about Rs 544 after 60 years of age. The government support will stop after three years following which the worker continues to contribute in the scheme on his own. For now, the state aims at extending this facility to 1,66,000 workers and has demarcated Rs 20 crore for this year.

However, an official from the Board said that the Act was not clear on what action would be taken if the worker defaults on the monthly premium or if he could withdraw the amount after three years, when the government stops payment from its side.
Besides NPS, KUWSSB intends to primarily offer three benefits for now – death benefit, accident benefit and education benefit for workers’ children.

(Published in Deccan Herald on 23rd September, 2010)

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