Type: Schemes

Central Idea

• Andhra Pradesh’s Guaranteed Pension System (GPS) blends elements from both old and new pension schemes, offering the advantages of a guaranteed pension while not overly straining the state’s finances.
• This innovative system holds the potential to preserve India’s hard-won pension reforms.

What is the Andhra Pension System?

• A Hybrid Approach: The Andhra Pradesh Guaranteed Pension System Bill, 2023, recently approved by the state assembly, introduces a unique blend of the Old Pension Scheme (OPS) and the New Pension Scheme (NPS) implemented in 2004.
• Contributory Guarantee: This system ensures government employees a monthly pension equivalent to 50% of their last-drawn salary, including dearness allowance relief.
• Reason for Introduction: Andhra Pradesh introduced GPS as a response to resistance against NPS, which was viewed by many as inferior to the earlier scheme. The return to OPS was considered fiscally unsustainable, with the potential to drive the state’s fiscal deficit to 8% by 2050.

Breakthrough created

• Long-standing Pension Reforms: India struggled for over a decade to implement pension reforms that led to the introduction of NPS in 2004.
• Growing Discontent: Over time, public sentiment favored those receiving pensions under the old scheme, leading to discontent.
• Political Promises: Political parties capitalized on this discontent, pledging to return to the old scheme if elected.
• Andhra’s Middle Path: Andhra Pradesh’s GPS offers a middle ground, preventing a regressive return to the old scheme while addressing concerns about NPS.

How does the Andhra System work?

• Enhancing Attractiveness: The contributory system guarantees a pension equivalent to 50% of the last drawn salary.
• Balancing Financial Burden: Any shortfall in NPS returns is covered by the government.
• Current NPS Pensions: Presently, NPS pensions amount to around 40% of an employee’s last drawn salary. Therefore, the government only has to fund the remaining balance.

Alternative to NPS

• Contributory Nature: NPS is a contributory scheme, with both employees and employers contributing to a corpus invested for returns.
• Uncertainty: In NPS, the pension amount is not guaranteed, as it depends on corpus returns influenced by market conditions.
• Ignoring Inflation: NPS does not consider inflation or pay commission recommendations.
• Market Dependency: Opposition to NPS is fueled by fears of further reductions in pension due to adverse market conditions.

Why not revert to the Old Pension Scheme?

• Budgetary Constraints: Under OPS, pensions were financed through the budget.
• Unsustainable Growth: Pension liabilities for all states saw a compound annual growth rate of 34% for a 12-year period ending in 2021-22.
• Budgetary Impact: In 2020-21, pension outgo accounted for 29.7% of states’ revenues.
• Development Challenges: A return to OPS would strain government funds, hindering development efforts and operational financing.
• Competitiveness Concerns: Such a shift could negatively impact India’s ease of doing business and overall competitiveness.

Central Idea

• The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme has faced persistent criticism, with allegations of high corruption rates.
• A critical component meant to address this issue is the social audit units tasked with detecting malpractice within the program.
• However, the recovery of embezzled funds has been notably ineffective.

What is MGNREGS?

Issue of Inadequate Fund Recovery

• Current Recovery Rates: Statistics from the Union Rural Development Ministry for the ongoing financial year indicate that less than 14% of the amount flagged by auditors has been successfully recovered.
• Past Years’ Performance: The recovery figures for previous financial years paint a similarly bleak picture, with poor outcomes:

• 1. 2022-23: ₹86.2 crore was identified as recoverable, but only ₹18 crore (20.8%) was retrieved.
  2. 2021-22: ₹171 crore misappropriation was flagged, but only ₹26 crore (15%) was recovered.

• Social Audit Unit Independence: Section 17 of the MGNREGA Act mandates gram sabhas to monitor work execution, with independent social audit units in each state responsible for uncovering malpractice. However, their scope is limited to flagging issues, leaving recovery actions to state governments.

Fund-Starved Audit Units

• Seminar Insights: A recent Ministry seminar revealed a concerning scenario of underfunded social audit units lacking adequate training and personnel. These units play a crucial role in identifying cases of malpractice.
• Funding Delay Issues: While the Union government funds these audit units to maintain their independence from state authorities, units in some states, such as Karnataka and Bihar, have faced funding delays for nearly two years.

Poor Monitoring and Recovery

• Consistent State Trends: Over the past three years, certain states consistently report “zero number of cases” and “zero recoveries,” casting doubt on the effectiveness of monitoring efforts.
• Examples of Poor Recovery: States like Telangana have active social audit units flagging numerous cases, yet the recovery rates remain dismal. For instance, in the ongoing financial year, auditors identified ₹6.6 crore for recovery, but only ₹2,087 has been recuperated so far.
• Vigilance and Pressure: While the Centre’s vigilance and pressure on states to recover misappropriated funds are appreciated, there are concerns regarding states that identify multiple cases but struggle with recovery. Furthermore, states reporting no cases indicate a lack of effective monitoring.

Conclusion

• Challenging Recovery Landscape: The MGNREGA scheme’s social audit units serve as a crucial mechanism to combat corruption, but the inadequate recovery of embezzled funds threatens their credibility.
• Need for Adequate Resources: To make the audit process effective, it is imperative to ensure that social audit units are adequately funded, trained, and staffed.
• Balancing Act: Balancing scrutiny with recovery actions is vital to enhance the transparency and integrity of the MGNREGA scheme, which plays a pivotal role in rural employment and development.

Central Idea

• The Aatmanirbhar Bharat Rozgar Yojana (ABRY) by the Central Government has outperformed its initial employment targets, proving its effectiveness in fostering job creation during the COVID-19 crisis.

About Aatmanirbhar Bharat Rozgar Yojana (ABRY)

 Achievements and Numbers

• The scheme, open for registrations until March 31, 2022, targeted around 7.18 million employees across India.
• By July 31, 2023, ABRY had already exceeded its target, enrolling over 7.58 million new employees.
• Benefiting 1,52,380 establishments with 60,44,155 new employees, the scheme disbursed benefits totaling Rs. 9,669.87 Crore.

Central Idea

• The Parivar Pehchan Patra (PPP), introduced in 2020 and rolled out in September 2021 in Haryana, has evoked both attention and criticism.

Parivar Pehchan Patra

• The PPP assigns a unique 8-digit identity number to each family unit residing in Haryana.
• Enrolment in the PPP is obligatory for accessing government services and social security schemes.
• Families can register through Common Service Centers, SARAL Kendras, or registered PPP operators, with verified data collected based on self-declarations and strict procedures.

Key Functions and Linkages

• The PPP streamlines access to various public welfare programs, including subsidized rations, Old Age Samman Allowance, Divyang Pension, educational admissions, government exams, and more.
• It gathers extensive data, encompassing family members’ details, Aadhaar numbers, demographics, educational and occupational information, immovable property ownership, and social status.

Comparing PPP with Aadhaar

• The scheme’s proponents note that PPP leverages Aadhaar’s digital framework but offers a more intricate delivery.
• While Aadhaar focuses on unique identity information, PPP encompasses socio-economic data, validated through specific procedures.

Opposition’s Concerns and Criticisms

• A former CM highlighted data collection errors leading to people being denied subsidies and benefits.
• A legislator raised multiple objections, alleging misuse of data for voter profiling, and criticized the depth of personal information required.
• Concerns were raised about the need for Aadhaar details, caste, PAN card, bank account, and property information. It was asserted that social security doesn’t necessitate caste identification.
• The criticism extended to the potential exploitation of caste-based and socio-economic data for electoral advantages.

Conclusion

• The Parivar Pehchan Patra scheme in Haryana aims to streamline government services and welfare delivery.
• While the initiative offers benefits, concerns about data accuracy, privacy, and potential political manipulation necessitate careful scrutiny and public discourse.