A government-commissioned study says most social pension beneficiaries spend the money on food, medicines and treatment.
The central pension amount under the National Social Assistance Programme has not been increased since 2012.
The report recommends a national floor pension linked to inflation, saying current support is inadequate for elderly people, widows and disabled people.
The pension amount under the National Social Assistance Programme has not been increased since 2012, even as a study commissioned by the Union Ministry of Rural Development has recommended linking pensions to inflation. A large share of the social pension given to elderly people, widows and disabled people by the central and state governments is being spent on food and medical treatment, beneficiaries have said.
But amid rising inflation, many said the amount was proving to be severely inadequate. A report on the National Social Assistance Programme (NSAP), found that 65 per cent of beneficiaries were spending pension money on treatment for illnesses, while 63 per cent said receiving a pension had improved their access to food.
According to the report, the central government has not increased its pension contribution since 2012, although for many beneficiaries the pension remains their main source of livelihood support.
The central government launched the NSAP in 1995 to provide social security to poor elderly people, widows and persons with disabilities, in line with its responsibility to provide social assistance to vulnerable and needy citizens under Article 41 of the Constitution.
The scheme was initially fully sponsored by the central government. Over time, several state governments expanded its scope and increased pension amounts by adding their own funds, known as “top-ups”.
According to the report, about 30 million people are covered by central NSAP schemes, while another 58.7 million receive pension support through additional state schemes. This means that, taken together, central and state social pension schemes cover nearly 90 million people across the country.
State governments and Union Territories spent over Rs 1,09,000 crore on additional “top-ups” to social pension schemes and on their own state-level schemes between 2017 and 2021, compared to the Rs 34,432 crore spent by the central government during the same period.
The programme is administered by the Union Ministry of Rural Development. The ministry commissioned the Delhi-based Academy of Management Studies to assess the scheme’s impact, transparency and implementation on the ground.
The organisation surveyed 6,000 beneficiaries in 600 gram panchayats across 10 states to study the scheme’s benefits, shortcomings and delivery.
The report submitted to the ministry says the largest share of pension money is spent on food and medical care. Sixty-three percent of beneficiaries said receiving a pension had improved their access to food, while 65 per cent said it had enabled them to spend on medical and health services.
Sixty-eight percent said they were able to buy essential household and personal items because of the pension. The study also found that 75.1 per cent of beneficiaries said receiving a pension had reduced their dependence on earning members of the family. Another 16.5 per cent said their financial dependence had reduced significantly.
About 67 per cent to 68 per cent of beneficiaries said receiving a pension had increased their respect within the family and society, and strengthened their sense of self-reliance and self-respect.
But the impact varied significantly between states.
In Jammu and Kashmir, Telangana and Tamil Nadu, between 70 per cent and 90 per cent of beneficiaries said pensions had clearly improved their access to food, medical care and daily necessities.
In states such as Andhra Pradesh and Haryana, where governments provide additional top-up pensions, beneficiaries said the pension helped more with household expenses and buying medicines.
In lower-income states such as Bihar and Uttar Pradesh, most beneficiaries said their entire pension was spent on food and medicine, leaving no room for savings. In Gujarat, some beneficiaries reported being able to save small amounts, which the study attributed to relatively higher state support.
Only 969 of the 6,000 beneficiaries surveyed said they were able to save some money from their pension. By contrast, 83.9 per cent said they were unable to save anything.
Most beneficiaries said the current pension amount was not enough to cover food, medical care, electricity, water and other essential expenses. Nearly 89 per cent said the government should provide more funds to increase pension amounts and improve related services.
The report found that in states where governments provide higher top-up amounts, such as Andhra Pradesh, Telangana and Tamil Nadu, beneficiaries reported relatively better satisfaction and quality of life. In states with lower top-up amounts, such as Assam, Bihar and Uttar Pradesh, beneficiaries faced more difficulties.
Under the Indira Gandhi National Old Age Pension Scheme, which comes under the NSAP, elderly people aged 60 to 79 receive Rs 200 a month. Those aged 80 and above receive Rs 500 a month. Under the widow pension scheme and the disability pension scheme, beneficiaries receive Rs 300 a month, while those aged over 80 receive Rs 500.
Under the National Family Benefit Scheme, a lump sum of Rs 20,000 is provided after the death of the earning member of a family. States provide different top-up amounts over and above the basic pension provided by the central government.
In Haryana, elderly people receive a pension of about Rs 3,000 a month. Telangana’s Aasara scheme provides support of about Rs 2,000 to Rs 4,000 to elderly people, widows and disabled people. Andhra Pradesh’s NTR Bharosa scheme also provides pensions of Rs 2,750 or more. In Tamil Nadu, the state government adds to the central contribution, taking the total pension to about Rs 1,000 a month.
In states such as Gujarat, Uttar Pradesh, Bihar and Assam, the additional assistance is relatively small. In many states, the total pension is limited to between Rs 500 and Rs 1,000 a month.
The report strongly recommends that the scheme be continued. It says that despite India’s rapid economic growth, the central government’s pension amount has remained virtually unchanged since 2012.
It recommends introducing a “national floor pension” and linking the pension amount to inflation, so that it can be increased periodically to ensure a dignified life for beneficiaries. A national floor pension would mean setting a minimum pension amount, below which no state would provide a social pension.
The report says inflation and the rising cost of living have continuously reduced the real value of the pension, leaving the needs of poor elderly people, widows and disabled people unmet. It also makes several recommendations to improve implementation.
It says that instead of relying on the poverty line list, a new identification system should be adopted, using verified digital systems such as Aadhaar, social registries and state family IDs. This, the report says, would help identify eligible people more accurately and prevent fake or duplicate beneficiaries.
It also recommends setting up facilitation centres at village and ward level, where elderly people, widows and disabled people can get help with registration, documentation and grievance redressal.
Under the rules, pensions are meant for people below the poverty line. But in the absence of a uniform national poverty line, states have set different income limits. In Assam and Bihar, the annual income limit is less than Rs 27,000. In Chhattisgarh, it is Rs 24,000 a year.
In Gujarat, a family must have an annual income of less than Rs 100,000 in rural areas and less than Rs 120,000 in urban areas to be included in the below poverty line (BPL) list. In Uttar Pradesh, the income limit is Rs 46,080 in rural areas and Rs 56,460 in urban areas. In Haryana, the annual income limit is less than Rs 300,000.
In Andhra Pradesh, the limit is Rs 100,000 in rural areas and Rs 120,000 in urban areas. In Telangana, rural families must have an annual income of less than Rs 150,000, while urban families must earn less than Rs 200,000. In Tamil Nadu, the income limit is Rs 60,000 a year.
In Jammu and Kashmir, eligibility is determined on the basis of the BPL list and a quarterly income survey, with the annual income limit set at Rs 120,000.
The study also found sharp differences in income distribution between states. In Bihar, 80.5 per cent of families had an annual income of less than Rs 50,000. In Uttar Pradesh, the figure was 74.5 per cent.
The report said this indicated extreme economic vulnerability in these states. More than half the families surveyed in Gujarat, Telangana, Tamil Nadu, Andhra Pradesh and Haryana also fell into this income bracket.
The figures were 67.7 per cent in Gujarat, 59.5 per cent in Telangana, 57.7 per cent in Tamil Nadu, 54 per cent in Andhra Pradesh and 53.5 per cent in Haryana. Chhattisgarh, by contrast, had the highest share of families earning between Rs 50,000 and Rs 100,000 a year, at 54.8 per cent.
The report found that Jammu and Kashmir differed from other states. There, 92.3 per cent of families had annual incomes between Rs 100,000 and Rs 300,000, while 4.7 per cent were in the Rs 300,000 to Rs 600,000 income bracket.
In Assam, 40.5 per cent of families were in the Rs 100,000 to Rs 300,000 income bracket. According to the study, these income disparities show that social security and pension schemes remain a crucial source of livelihood for low-income families.
The report also raises serious concerns about corruption and the role of middlemen in the pension approval and activation process. During the study, 162 beneficiaries said they had to pay additional money to government officials or middlemen to get their pensions approved or activated.
Of these, 46 per cent said they had paid an agent or middleman. The average amount paid by such beneficiaries was about Rs 1,400, although there were significant differences between states. In Tamil Nadu, some beneficiaries reported paying up to Rs 5,000.
The report also found that in many places, informal arrangements forced beneficiaries to pay intermediaries their entire pension for the first six months, or about 10 per cent of their monthly pension for a year. The study describes this as a serious irregularity that works against the interests of poor beneficiaries.
It recommends that the authorities strictly prohibit such fraudulent and corrupt practices.