NEW DELHI:  A fair amount of recent research in economics brings out the lifelong value of adequate care in early childhood. That, in turn, depends a great deal on mothers’ access to health, nutrition, rest, resources and power. This is the main reason why the National Food Security Act 2013 provides for maternity entitlements of Rs. 6,000 per child for all pregnant women, except those already covered in the formal sector.

Four years down the line, however, these entitlements are yet to be realised. Until last year, they were still confined to 53 pilot districts under the Indira Gandhi Matritva Sahyog Yojana(IGMSY), a pilot scheme initiated before the NFSA came into force. On 31 December 2016, the Prime Minister announced a new maternity benefit scheme, known today as Pradhan Mantri Matru Vandana Yojana (PMMVY). The pilot scheme was phased out, but the new scheme is yet to be operationalised in most states.

In response to a Right to Information (RTI) query last September, the Ministry of Women and Child Development disclosed that only Rs. 800 crore had been spent under PMMVY so far. That is about one tenth of what is required from the central government for full-fledged implementation of maternity benefits as per NFSA norms, assuming a 60/40 ratio for centre/state contributions. Further, the draft PMMVY rules restrict maternity benefits to one child per woman. This is difficult to understand: India does not have a one-child policy. Further, while the NFSA states that maternity entitlements are “subject to such schemes as may be framed by the central government”, this is surely not a licence for the said schemes to dilute women’s rights under the Act. Maternity entitlements can also be regarded as an implicit right of the child. In that perspective, restricting maternity benefits to one child per woman would be discriminatory.

There is, thus, much catching up to do on maternity entitlements. The forthcoming Budget is an opportunity to make up for the inertia of the last few years. The Economic Survey 2015-16, incidentally, included an innovative chapter on “Mother and Child”, where the value of maternity benefits is well recognised. This recognition, however, is yet to be translated into action.

Similar things can be said of social security pensions. The central government’s contribution to old-age pensions, just Rs. 200 per month, has remained unchanged since 2006. Many states, of course, top up the central contribution, but even the topped-up amounts are very modest (much less than Rs. 1,000 per month in most states). Surely, elderly persons deserve better treatment in a fast-growing economy.

Recent research suggests that pension schemes are among India’s best social security programmes, with low administrative costs, relatively little corruption, and positive effects on the lives for widows and the elderly. There are good reasons for consolidating these programmes, not only by raising the pension amounts, but also by expanding their coverage. Along with this, it is very important to streamline the payment system, so that pensions are paid promptly every month. As things stand, there are prolonged and unpredictable delays in most states, defeating the purpose of social security pensions. More than 15 years have passed since the Supreme Court directed the central and state governments to ensure that pensions are paid by the 7th of each month – this is not rocket science.

Last but not least, maternity entitlements and social security pensions share a common anomaly. The benefits are fixed in money terms, and tend to stagnate until such time as a clamour emerges for more. This can take many years. There is a need for automatic revision over time, not only in tune with the price level, but also to ensure some growth of real benefits.

60 economists have written to the Finance Minister with this request:

Here is the full text of the letter:

Dear Mr Jaitley

We are writing to draw your attention to two urgent priorities for the forthcoming Budget.

  1. Social security pensions: The central government’s contribution to old-age pensions under the National Old Age Pension Scheme (NOAPS) scheme has remained at a measly Rs 200 per month since 2006. This is extraordinarily stingy. It is also a missed opportunity: NOAPS is a good scheme (with low leakages and administrative costs) that reaches some of the poorest members of society. The central government’s contribution should be immediately raised to Rs 500 (preferably more) at the very least. This requires an additional allocation of Rs 8,640 crore or so, based on the current NOAPS coverage (2.4 crore pensioners). Similarly, widow pensions should be raised from Rs 300 per month to Rs 500 at the very least. This would cost just another Rs 1,680 crore.
  2. Maternity entitlements: Maternity benefits of Rs 6,000 per child are a legal entitlement of all Indian women (except those already covered in the formal sector) under the National Food Security Act, 2013. For more than three years, the central government did virtually nothing about this. On December 31, 2016, Prime Minister Narendra Modi finally announced that maternity benefits would be provided very soon. One year later, however, (1) the new scheme framed for this purpose (Pradhan Mantri Matru Vandana Yojana) is yet to be operationalised, (2) the provision made for it in the Union Budget 2017-18 (Rs 2,700 crores) is barely one third of what is required based on NFSA norms; and (3) in flagrant violation of the Act, PMMVY restricts the benefits to Rs 5,000 for just one child per woman. The Union Budget 2018-19 should provide for full-fledged implementation of maternity entitlements as per NFSA norms. This requires at least Rs 8,000 crore, based on a 60:40 ratio for centre:state contributions.

Along with this, it is very important to streamline payment systems so that pensions and maternity benefits reach the recipients on time every month, e.g. by the 7th day of the month as directed by the Supreme Court in its order of November 28, 2001.

We hope that these recommendations are useful.

Yours sincerely,
1. Abhijeet Singh (Assistant Professor of Economics, Stockholm School of Economics)
2. Abhijit Banerjee (Professor of Economics, MIT)
3. Aditya Bhattacharjea (Professor of Economics, Delhi School of Economics)
4. Ajit Ranade (Chief Economist, Aditya Birla Group)
5. Ashok Kotwal (Professor of Economics, University of British Columbia)
6. Ashwini Deshpande (Professor of Economics, Delhi School of Economics)
7. Atul Sarma (Visiting Professor, Council for Social Development)
8. Bharat Ramaswami (Professor of Economics, Indian Statistical Institute, New Delhi)
9. C. Rammanohar Reddy (Visiting Research Professor, University of Goa)
10. Debraj Ray (Professor of Economics, New York University)
11. Deepti Goel (Assistant Professor of Economics, Delhi School of Economics)
12. Dibyendu Maiti (Associate Professor of Economics, Delhi School of Economics)
13. Dilip Abreu (Professor of Economics, New York University)
14. Dilip Mookherjee (Professor of Economics, Boston University)
15. Dipa Sinha (Assistant Professor, Ambedkar University, Delhi)
16. Gaurav Datt (Associate Professor of Economics, Monash University)
17. Himanshu (Associate Professor of Economics, Jawaharlal Nehru University)
18. Farzana Afridi (Associate Professor of Economics, Indian Statistical Institute, New Delhi)
19. Jayati Ghosh (Professor of Economics, Jawaharlal Nehru University)
20. Jean Drèze (Honorary Professor, Delhi School of Economics)
21. Jeemol Unni (Professor of Economics, Ahmedabad University)
22. J.V. Meenakshi (Professor of Economics, Delhi School of Economics)
23. K. Nagaraj (Adjunct Faculty, Asian College of Journalism)
24. K.P. Kannan (Honorary Fellow, Centre for Development Studies, Trivandrum)
25. Kirit Parikh (Emeritus Professor, Indira Gandhi Institute of Development Research, Mumbai)
26. Leela Visaria (Honorary Professor, Gujarat Institute of Development Research, Ahmedabad)
27. Maitreesh Ghatak (Professor of Economics, London School of Economics)
28. Manoj Panda (Director, Institute of Economic Growth, Delhi)
29. Mausumi Das (Associate Professor of Economics, Delhi School of Economics)
30. Mihir Shah (Visiting Professor, Shiv Nadar University)
31. Nalini Nayak (retired Associate Professor, PGDAV (M) College, New Delhi)
32. Naman Garg (Research Scholar, Columbia University)
33. Naresh Saxena (retired Secretary, Planning Commission)
34. Param Jit (Associate Professor of Economics, Delhi School of Economics)
35. Paul Niehaus (Associate Professor of Economics, University of California San Diego)
36. Pranab Bardhan (Professor Emeritus of Economics, University of California Berkeley)
37. Pranab Mukhopadhyay (Professor of Economics, Goa University)
38. Pulapre Balakrishnan (Professor of Economics, Ashoka University)
39. Pulin Nayak (retired Professor of Economics, Delhi School of Economics)
40. R. Nagaraj (Professor of Economics, Indira Gandhi Institute of Development Research, Mumbai)
41. Raji Jayaraman (Professor of Economics, ESMT Berlin)
42. Ravinder Kaur (Professor, Indian Institute of Technology, Delhi)
43. Reetika Khera (Associate Professor, Indian Institute of Technology, Delhi)
44. Rohini Pande (Professor of Public Policy, Harvard Kennedy School)
45. Rohini Somanathan (Professor of Economics, Delhi School of Economics)
46. S. Mahendra Dev (Director, Indira Gandhi Institute of Development Research, Mumbai)
47. Santosh Panda (Professor of Economics, South Asian University)
48. Shreekant Gupta (Professor of Economics, Delhi School of Economics)
49. Sreenivasan Subramanian (Professor of Economics, Madras Institute of Development Studies)
50. Srijit Mishra (Professor of Economics, Indira Gandhi Institute of Development Research)
51. Sudha Narayanan (Associate Professor, Indira Gandhi Institute of Development Research)
52. Sugata Bag (Assistant Professor of Economics, Delhi School of Economics)
53. Sujata Visaria (Associate Professor of Economics, University of Hong Kong)
54. Sukhadeo Thorat (Professor Emeritus, Jawaharlal Nehru University)
55. Sunil Kanwar (Professor of Economics, Delhi School of Economics)
56. Surender Kumar (Professor of Economics, Delhi School of Economics)
57. Tridip Ray (Professor of Economics, Indian Statistical Institute)
58. Uday Bhanu Sinha (Professor of Economics, Delhi School of Economics)
59. Vijay Joshi (Emeritus Fellow, Merton College, Oxford University)
60. Vijay S. Vyas (Professor Emeritus, Institute of Development Studies, Jaipur)

 

 

 

Annexure
Maternity Entitlements: Recap
1. In 2013, maternity benefits became a legal entitlement of all Indian women (except those already
receiving similar benefits as regular government employees or under other laws) under the National
Food Security Act, Section 4: “Subject to such schemes as may be framed by the Central Government,
every pregnant and lactating mother shall be entitled to [nutritious food and] maternity benefit of not
less than rupees six thousand, in such instalments as may be prescribed by the Central Government”.
2. At that time, a pilot scheme called Indira Gandhi Matritva Sahyog Yojana (IGMSY), with benefits of
Rs 4,000 per child, was being implemented in 53 districts. Under IGMSY, maternity benefits are
conditional and also restricted to two live births.
3. On 30 October 2015, the Ministry of Women and Child Development filed an affidavit in the Supreme
Court, claiming that it was planning to extend IGMSY from 53 to 200 districts in 2015-16 and all districts
in 2016-17. Yet, the budget allocation for IGMSY in the 2016-17 Union Budget remained a measly Rs
400 crore (as in 2015-6 and 2014-5), making it impossible to go beyond the 53 pilot districts.
4. The importance of maternity entitlements was well articulated in the Economic Survey 2015-16, in a
welcome chapter on “Mother and Child”. However, this was not reflected in the 2016-17 Budget.
5. In April 2016, the IGMSY Rules 2016 were notified. The Rules extend IGMSY (with benefits of Rs 6,000
in two instalments) to all pregnant women for the first two live births. But it seems that this was just
a ritual – it had no impact on actual policy.
6. On 31 December 2016, Prime Minister Narendra Modi announced that pregnant women nation-wide
would soon be getting maternity benefits of Rs 6,000.
7. Further to the PM’s announcement, an allocation of Rs 2,700 crores was made for “maternity benefit
programme” in the Union Budget 2017-18. However, this is a fraction of what is required: universal
maternity entitlements of Rs 6,000 per child would require at least Rs 13,000 crore per year (assuming
a birth rate of 19 per thousand and an effective coverage of 90%).
8. On 22 February 2017, a consultation was held at Vigyan Bhawan, where state governments were told
that under the “proposed Maternity Benefit Programme”, maternity benefits of Rs 6,000 (in three
instalments) would be paid with retrospective effect from 1 January 2017. State governments would
have to contribute 40% of the costs. Funds were “likely to be released by the end of March 2017” and
would be disbursed “in DBT mode through PFMS”.
9. On 3 April 2017, the Ministry of WCD stated in an affidavit to the Supreme Court: “…the Government
of India has announced pan-India implementation of Maternity Benefit Programme with effect from
01.01.2017 in all the districts of the country. All the pregnant women and lactating mothers would
be given Rs 6,000 in instalments [except those already receiving similar benefits as regular
government employees or under other laws]”.
10. In a circular dated 19 May 2017, the Ministry of WCD informed the states that the Maternity Benefit
Programme had been “approved” (with retrospective effect from 01.01.2017) and that the scheme
and guidelines would be “sent shortly”. The circular also mentions that maternity benefits would be
restricted to the first live birth – a flagrant violation of the Act.
11. In August 2017, the MoWCD released the guidelines and draft Rules for Pradhan Mantri Matru
Vandana Yojana (PMMVY). Under PMMVY, maternity benefits (Rs 5,000 only) are restricted to the
first live birth. Conditionalities also apply. Further, the scheme is yet to be operationalised. Meanwhile,
IMGSY has been discontinued.

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