EPS 95 Minimum Pension Hike - Government's Stance - Pension Background
R Lakshmaiah
IN 2013, the United Progressive Alliance government led by the Congress party decided to increase the minimum pension to Rs 1000. However, it was not implemented. The NDA government led by Narendra Modi implemented it in 2014. But even today many people still receive a pension of less than Rs 1000. Since then, the prices of all goods and services have increased dramatically. Therefore, retired EPS pensioners and all the trade unions are demanding an increase in the minimum pension to Rs 9,000. In reality, Rs 9,000 is not enough for a husband and wife to survive on, even if they own their own house. Despite this, many articles, speculations, and false news stories are circulating around this issue. In this context, let's understand the background of the EPS-Pension.
EPS BACKGROUND
The working class and unions had long been demanding a pension as the third benefit, along with PF and Gratuity, for industrial workers. In the 1990s, the socialist systems collapsed in the Soviet Union and Eastern European countries, and a world dominated by the US emerged. Many countries took up the chorus that globalisation was the only path to progress. Against this backdrop policies were formulated across the world in line with globalisation. At this juncture, P V Narasimha Rao became the Prime Minister and Manmohan Singh the Finance Minister in our country in 1994. A key aspect of globalisation is the government stepping away from its responsibility towards the people and leaving them at the mercy of market forces. The EPS 1995 came in this context. It essentially meant workers paying 8.33 per cent of their PF funds into a pension fund and buying a pension from it. Therefore, the pension currently received is bought by the workers from the total amount deposited from their hard-earned money; it is not charity or an act of grace.
The CITU called for a one-day nationwide protest strike against this deceitful pension scheme. Workers from other unions also participated in the strike alongside CITU. Cases were filed in the courts challenging the deceitful pension scheme, eventually reaching the Supreme Court. The Supreme Court dismissed the case after the Central Government told it that "this is a beginning, and the scheme will be reviewed and improved every year." But the government buried the promise given to the court.
Just like taking medicine for a minor ailment and losing the whole tongue, the present Narendra Modi government scrapped some provisions that were favourable to the workers in the year 2014.
How Many EPS Pensioners are There? How Much Pension Do They Receive?
The Ministry of Labour and Employment provided a written reply to a question asked by John Brittas, a Member of Parliament elected to the Rajya Sabha from the Communist Party of India (Marxist). The details in it are appalling. As of March 31, 2025, the number of workers/employees receiving a pension under EPS is 81,48,490. Of these, those receiving a pension of less than Rs 1500 per month are 49,15,416. This means that about 60 per cent of the pensioners are receiving a pension of only less than Rs 1500.
The number of those receiving between Rs 1501 and less than Rs 4000 is 30,54,144. The number of those receiving a pension between Rs 4001 and less than Rs 6000 is 1,25,389. That is to say, not a single person is receiving a pension of more than Rs 6,000 per month. This includes officers who retired after completing higher education and serving in various capacities. The minimum daily wage for unskilled workers fixed extremely poorly by the Central Government is Rs 178 per day, which amounts to Rs 5,340 per month. This means that the current pension is equal to the monthly wage earned by an unskilled worker. This is the pension purchased after toiling and serving for 25 years or more, creating wealth, and depositing PF funds with the government.
What Did the Supreme Court Say About Pension?
In a historic judgment on December 17, 1982, the highest court in India ruled that pension is not a bounty/charity/gift—it is the right of the employee (D S Nakara & others vs Union of India - 1982 AIR, 1983 SCR (2) 165). Previously, a Supreme Court judgment was considered equivalent to an Act of Parliament. In the era of globalisation, that notion has expired. But, the highest court confirmed that the demand by workers and unions for pension as the third benefit is absolutely correct. Therefore, it must be realised that pension should be achieved as a right and not be begged for as a favour.
MINIMUM PENSION HIKE
According to government statistics, the Consumer Price Index is increasing every year. The method used by the government to calculate this index is flawed and deceptive. Even according to those flawed calculations, it has increased by 78 points from 2014 until now. In our daily experience, the prices of goods and services have increased much more than that. Therefore, a pension increase is unavoidable.
The High-Level Monitoring Committee appointed by the Labour Ministry recommended to the Central Government in 2022 that the minimum pension be increased from Rs 1000 to Rs 2000. The Labour Ministry sent that recommendation for the approval of the Finance Ministry, which rejected it. This was officially announced in the 235th Central Board of Trustees (CBT) meeting held on February 10, 2024. Nirmala Sitharaman was the Finance Minister, then and now too.
CBT MEETING
The date, location and agenda of the CBT meeting are decided in advance. The Ministry of Labour and Employment had announced that the 238th meeting would be held in Bengaluru on October 10, 2025. However, 4-5 days before the meeting, the venue was changed to Delhi instead of Bengaluru, and the date was changed to the 13th instead of the 10th. The All Pensioners and Retired Persons Association had announced and prepared to hold a dharna (protest) in Bengaluru on the 10th, coinciding with the CBT meeting. Many people had even made railway reservations. It is, therefore, assumed that the venue was changed from Bengaluru to Delhi and the date from the 10th to the 13th due to this proposed protest.
The issue of minimum pension was not on the original agenda. Nevertheless, R Karumalaiyan, National Secretary of CITU and a CBT member, used his special privilege as a member to question the meeting about the minimum pension hike. The Labour Minister's reply to this was, "It is under the government's consideration." Ministers attending the meeting should discuss the issues and come prepared. Moreover, the Minister knows that widespread protests are happening across the country demanding the minimum pension hike. Even so, not stating specifically that it will be increased or by how much—is this the arrogance of having power and being able to say anything, or a disregard for pensioners?
Salaries, Allowances, and Pensions of Members of Parliament
The salaries and pensions of Members of Parliament are determined according to the Salary, Allowances and Pension of Members of Parliament Act, 1954. This Act was amended in 2018 to allow for an automatic increase every five years, linked to inflation.
In 2014, the basic salary of an MP was Rs 50,000 per month and the monthly pension was Rs 20,000. Today, the basic salary is Rs 1,24,000 per month, and the pension is Rs 31,000. Besides these, there are many other substantial allowances, which have also increased. Let's not delve into those for now. Just the basic salary has increased by about 150%, and the pension by 50%. This is the attitude of the Government towards the voters who voted for their victory and became Ministers. (It is to be noted that nearly 86 per cent of the sitting MPs in Lok Sabha are crorepatis). MPs do not contribute a single rupee from their salaries to the government for their pension. When governments and rulers like this speak about the financial burden of increasing our pension and tell us to starve to death, should we stand by and watch? Or should we fight and achieve a fair increase as a right?
Is Financial Difficulty Really the Reason?
The Central Government has waived (even without writing the word “waived”) nearly Rs 25 lakh crore of loan money taken by big industrialists, which was the savings deposited by the common public in banks and other financial institutions. Not only that, the government has lost thousands of crores of rupees in revenue due to the reduction of taxes for big industrialists. There are bigwigs who do not even properly pay the minimum required taxes. No action is taken against them. More so, they are being funded by public money in the name of different incentives. Compare this with the additional annual cost of providing a minimum pension of Rs 9,000 per month to every pensioner – it is only Rs 68,000 crore.
What Does the Constitution Say?
According to Article 21, Right to Life is a Fundamental Right of all citizens. In 1978, the Supreme Court expanded the Right to Life of citizens, ruling: "Not just physical existence, but the right to live with dignity and all that goes with it - such as right to livelihood, right to health and medical care, right to a clean environment, right to privacy, right to shelter, right to education."
Does the current pension provide the right to live with dignity? No.
How is the Welfare of the Elderly Abroad?
Many low- and middle-income countries in the world are expanding non-contributory pensions to cover people who never worked in formal sectors. Social pensions are seen as important for reducing elderly poverty. This is a global experience. In various countries, pension schemes providing $700 to $2,500 per person per month are being implemented, based on local prices and living conditions.
Considering the above facts, paying a minimum monthly pension of Rs 9,000 to all the pensioners is mandatory and essential. This increased money will not be stashed away illegally by pensioners in Swiss banks. The increased amount will be spent. The government will then get additional revenue back in by way of taxes on that expenditure. This will contribute to a certain extent to additional production of goods, creation of new employment opportunities to the unemployed youth, and the growth of the country's GDP. This means the pension hike is neither a burden on the government nor will it only benefit the pensioners. It is an investment for the country's development.
What’s the Solution?
There must be a large-scale agitation across the country until the minimum pension is increased to Rs 9,000 per month for all the pensioners. This should be seen not just as an issue for the elderly but as a need for the entire society, and everyone should participate. Pressure must be built up on the government to achieve the pension hike.
