The National Social Assistance Programme (NSAP) began in 1995 to provide pensions to the elderly, women in distress (widowed, abandoned, single women, etc.) and to persons with disabilities through three sub-schemes:
1) Indira Gandhi National Old Age Pension Scheme (IGNOAPS),
2) Indira Gandhi National Widow Pension Scheme (IGNWPS), and
3) Indira Gandhi National Disability Pension (IGNDPS).
All are non-contributory social security pensions. The NSAP also includes the National Family Benefit Scheme and Annapoorna scheme, but those are not being discussed here.
The Comptroller and Auditor General’s (CAG) 2023 performance audit of the NSAP is an eye-opener. It uses government data as well as a field study. The focus here is on the findings based on government data. Sometimes, the reference year for the data has not been provided in the CAG report. There are reasons to believe that the data are now slightly out of date – wherever possible, updated data is provided to give a sense of how much of a mismatch there is.
“Ever since the strategic decision to bring the NSAP scheme within the umbrella of ‘Core of Core’ scheme in 2016, the financial commitment towards meeting the 100% requirement of the scheme by the Central Government is continuously increasing.”
However, as per the data presented in the CAG report, the NSAP is a “Central” scheme only in name.
Between 2017-2021, out of the total expenditure on NSAP, the Union government’s contribution is merely 24%.
According to the CAG report, the Union government spent Rs 34,432 crores on NSAP. According to Union Budget documents, the expenditure on NSAP in these years is slightly higher, at Rs 35,052 crores. But the states together spend Rs 1,09,044 crores on top-ups (additional money to make up for the low amounts provided by the Union government) and additional beneficiaries, over and above those supported by the central scheme.
But as we shall see below, in fact, the Central contribution may be even lower.
Here are four major issues highlighted by the audit:
1. Poor coverage
The coverage by the Union government is capped at 3.19 crores by applying the state-wise Below Poverty Level estimates to the 2001 census. Yes, the 2001 census – this is not a typo. Even this outdated Central quota is not fully utilised. The coverage is 2.83 crores, as per the CAG report.
But there are discrepancies. For Rajasthan, according to the state portal, the Centre supports 12 lakh pensioners, whereas the figure in the CAG report is lower – 9.5 to 9.7 lakhs in 2017-18 and 2018-19.
This is important because one of the “key principles” of NSAP is universal coverage of eligible beneficiaries.
2. Non-revision of pension amount
The last revision to the pension amount was in 2012, when the central contribution increased from Rs 200 per month to Rs 500 per month for those aged 80 years and above. For IGNDPS and IGNWPS, central contribution was enhanced to Rs 300 per month (see Table 1.1 below). For those below 80 years, it has been Rs 200 per month since 2007.
The CAG report refers to four separate reports of the Standing Committee on Rural Development that repeatedly “expressed concern on the meagre amount” and to increase the amount. In response, the government expressed its “inability” to enhance the amount, “in the wake of decision taken at the highest levels in Government to continue with the existing system.”
3. States step up to the challenge
According to the CAG report, 33 states and Union territories implement their own state-level schemes.
Several state governments have added new categories of social security pensioners (e.g., agricultural workers, toddy tappers, etc.) but those seem to be out of the purview of the CAG audit.
State schemes serve two purposes:
One, to top-up the pension amount because the central contribution is measly (Rs. 200-500 per month). The top-ups range from Rs. 150-200 (in Chhattisgarh and Bihar) to Rs 2,300 (in Haryana and Andhra Pradesh). Table 3.4 below, reproduced from CAG report, has state-wise top ups.
The CAG report states that Goa, Punjab, Nagaland, Manipur and Assam do not top up or hardly top up.
Note: Some of the pension top-ups mentioned in this table are already out of date. For instance, in 2023, Tamil Nadu enhanced its contribution to Rs. 1000 from Rs. 800, in Odisha it was increased to Rs. 800 in the 2024 budget.
Two, in order to move towards the goal of universal coverage, states identify additional pensioners to whom the entire pension is given by the state, with no Central contribution. In some states, the coverage through state schemes far out-strips central coverage. For instance, according to data from state governments, Odisha’s Madhu Babu Pension Yojana covers 58% of all pensioners and 87% pensioners in Rajasthan are supported entirely through the state scheme. According to data provided by the states to the CAG (Table 3.2), in 2020-21, 43% pensioners (2.1 crores out of 4.9 crores) were supported entirely through state schemes. However, this figure is likely to be an under-count of coverage by states.
Data compiled by independent researcher Karuna Muthiah suggests that the total number of NSAP beneficiaries is more than 8 crores, not 4.9 crores as the CAG finds. This suggests that the share of state pensioners is 60%.
4. Delayed pension payments
Another major issue highlighted by the report is that pensions are not paid on time. Only 11 states pay pensions on a monthly basis, though that is supposed to be the norm. In fact, in 2001, directed by the Supreme Court that pensions should be paid by the 7th of every month. Four states were paying on a quarterly basis and in two, payments are made annually!
The NSAP is a lifeline for crores of vulnerable people (see Chopra and Pudussery 2014 and Drèze and Duflo, 2022). A revision of coverage and pension amounts is urgently required. Apart from the repeated recommendations by the Standing Committee on Rural Development, economists have written to the finance minister thrice (in 2017, 2018 and 2022) about this. The Congress manifesto has promised to increase central contributions to Rs 1,000 per month. The BJP manifesto does not mention this scheme.
Timeliness of payments also needs attention.
Instead of focussing on these three key aspects, the government’s attention has been focussed on standardising the mode of payment (i.e., forcing direct benefit transfer and Aadhaar-based payment system) across the country, without consideration to whether it is suitable. This has created additional problems for pensioners – getting to a bank, crowds, additional paperwork, cancellations and so on – who were already struggling to lead life with dignity.
Reetika Khera is Professor of Economics at IIT Delhi.