FM announces pension for informal workers, hikes tax-free gratuity to Rs 30 Lakh

New Delhi: Finance Minister Piyush Goyal on Friday announced 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.

Also Read: Budget 2019: Full text of finance minister Piyush Goyal’s speech in Parliament

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

Besides, pension scheme for 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 100 rupees per month, for workers in unorganised sector after 60 years of age," Goyal said while presenting the Interim Budget for 2019-20.

The minister informed the House that the government will also provide a matching contribution of Rs 100 for every unorganised workers covered under the scheme, which is expected to benefit 10 crore workers in next five years.

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

He said that there are around 42 crore unorganised sector workers, which contribute toward the growth of national economy.

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

The workers under the scheme will have to contribute Rs 100 per month and equal contribution would be paid by the government. The scheme will cover all those unorganised sector workers like autorikshaw driver, 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 five years.