QuickTake: Budget announces pension for workers in unorganised sector, hikes tax-free gratuity to Rs 30 L

The Finance Minister, in the Budget, also announced hiking of tax-free gratuity to Rs 30 lakh from existing Rs 20 lakh for employees having service of more than five years.

Finance Minister Piyush Goyal on Friday announced the launch of Pradhan Mantri Shram Yogi Mandhan (PMSYM) Scheme to provide unorganised workers an assured monthly pension of Rs 3,000 after 60 years of age.

The scheme will attract matching contribution of Rs 100 per month from the government as well as from the workers.

Besides the pension scheme for the unorganised workers, Goyal also announced hiking of tax-free gratuity to Rs 30 lakh from existing Rs 20 lakh for employees having service of more than five years.

"We are launching Pradhan Mantri Shram Yogi Mandhan today. The scheme will provide assured monthly pension of Rs 3,000, with contribution of Rs 100 per month for workers in the unorganised sector after 60 years of age," Goyal said while presenting the Interim Budget for 2019-20.

Goyal said, "The scheme will benefit 10 crore workers in the unorganised sector, may become the world's biggest pension scheme for unorganised sector in five years."

He added that there are around 42 crore unorganised sector workers in India, who contribute towards the growth of national economy.

The minister also informed the Lok Sabha that the government will provide Rs 500 crore initially for the scheme in the Budget.

The scheme will cover all those unorganised sector workers like autorikshaw drivers, construction labourers, rag pickers, etc. whose income is up to Rs 15,000 per month.

Goyal also announced hiking limit of tax free gratuity to Rs 30 lakh in his maiden Budget speech. The government had doubled the tax free gratuity to Rs 20 lakh in March last year. Hiking gratuity limit will enable employers to pay higher tax free gratuity to their employees who have worked for them for more than five years.