Context
A government-commissioned study submitted to the Union Ministry of Rural Development has highlighted that pensions under the National Social Assistance Programme (NSAP) have lost nearly 45% of their real value since 2012 due to inflation. The findings have raised concerns regarding the adequacy of social security support for vulnerable groups, particularly the elderly, widows, and persons with disabilities.
About the National Social Assistance Programme (NSAP)
Launched in 1995, NSAP is a centrally sponsored welfare scheme under the Ministry of Rural Development aimed at providing basic income support to economically vulnerable individuals living below the poverty line.
Major Components
- Indira Gandhi National Old Age Pension Scheme (IGNOAPS)
- Indira Gandhi National Widow Pension Scheme (IGNWPS)
- Indira Gandhi National Disability Pension Scheme (IGNDPS)
- National Family Benefit Scheme (NFBS)
- Annapurna Scheme
Existing Pension Structure and Coverage
- Under IGNOAPS, beneficiaries aged 60–79 years receive Rs 200 per month, while those aged 80 years and above receive Rs 500 per month.
- Under IGNWPS and IGNDPS, beneficiaries below 80 years receive Rs 300 per month, while those aged 80 years and above receive Rs 500 per month.
- Under NFBS, a one-time financial assistance of Rs 20,000 is provided after the death of the primary breadwinner.
- The programme currently covers more than 221 lakh elderly persons, around 67 lakh widows, and nearly 8.8 lakh persons with disabilities.
Key Findings of the Study
- Pension amounts under NSAP have remained unchanged since 2012 despite a significant rise in inflation.
- India’s Consumer Price Index (CPI) increased from 100 in 2012 to nearly 191 in 2024, reflecting cumulative inflation of around 91%.
- Due to rising prices, the real value of pensions has declined by nearly 45%.
- According to the report, Rs 200 in 2012 would now require around Rs 382 to maintain the same purchasing power, while Rs 500 would need to increase to nearly Rs 955.
Role of States in Strengthening Social Security
- States such as Andhra Pradesh, Telangana, and Haryana, which provide higher pension top-ups, reported better income security and reduced financial vulnerability among beneficiaries.
- Higher state contributions also improved the ability of elderly and disadvantaged groups to meet essential expenses related to food, healthcare, and daily living.
- The findings highlight the important role of state governments in strengthening social security through additional welfare support.
Challenges and Way Forward
| Challenges | Way Forward |
| Pension amounts remain inadequate to meet rising living and healthcare costs. | Periodically revise pension amounts in line with inflation. |
| Absence of inflation indexation reduces the real value of pensions over time. | Link pensions to CPI-based automatic revision mechanisms. |
| Interstate variations create unequal levels of social protection. | Introduce a National Floor Pension with minimum standards across states. |
| Rising elderly population is increasing demand for social security support. | Expand pension coverage and strengthen long-term welfare systems. |
| Limited central assistance reduces the effectiveness of support schemes. | Encourage greater state participation and transparent pension top-ups. |
Conclusion
The study highlights the need to strengthen India’s social security framework amid rising living costs and an ageing population. Periodic pension revision, greater state participation, and minimum national standards will be essential for ensuring financial security and social protection for vulnerable groups.
