Whereas the organised sector is at present covered by various pension, provident fund and gratuity schemes, the unorganised sector does not have adequate social security coverage. I am asking the Insurance Regulatory Development Authority to look into all these issues and provide a road map for pension reforms by October 1, 2001.
The Central Government pension liability has reached unsustainable proportions: as a percentage of GDP, it has risen from about 0.5 per cent in 1993-94 to 1 per cent in 2000-2001. As such it is envisaged that those who enter central government services after October 1, 2001 would receive pension through a new pension programme based on defined contributions. In order to review the existing pension system and to provide a roadmap for the next steps to be taken by the Government, I propose to constitute a High Level Expert Group, which would give its recommendations within 3 months.