Universal Pension Scheme in India

Abstract

Old age social security plays a pivotal role in a welfare state and one of the major components of old age social security is pension. The developed countries generally provide pension to those who contribute for pension whereas in majority of the developing countries pensions are provided in a discretionary manner which reduces the coverage of pension. India is no exception to this phenomenon and has a low coverage of pension too. The paper proposes a universal pension scheme that will bring relief to the working population in the unorganized sector and argues that it will increase the coverage of pension without disturbing the fiscal situation. The main purpose of pensions is smoothening of consumption and mitigating longevity risks, poverty and inter-intra generation inequality. Universal pension scheme would do this successfully for citizens in country.