National Family Benefit Scheme (NFBS)

Context

  • The National Family Benefit Scheme (NFBS), launched in 1995 under the National Social Assistance Programme (NSAP), is meant to help the survivors in these circumstances. Unfortunately, the scheme has been allowed to languish. The amount of emergency assistance is a paltry Rs 20,000, the scheme is restricted to “Below Poverty Line” (BPL) families, and the formalities are often forbidding.

Deliberate neglect of the NSAP in recent years

  • The central contribution to old-age pensions, for instance, has stagnated at a measly Rs 200 per month for nearly 15 years. Despite repeated pleas for an increase, including an open letter from 66 eminent economists in 2018, the central government refused to budge. National Family Benefit Scheme
  • The NFBS budget has also stagnated, making it impossible to expand its coverage or raise the benefits. In fact, central expenditure on NFBS declined from Rs 862 crore in 2014-15 to Rs 623 in 2020-21 (budget estimates), with revised estimates for 2020-21 even lower — just Rs 481 crore. In effect, the scheme is being quietly phased out.
  • In 2013, a task force chaired by Mihir Shah submitted an important report on NSAP to the Ministry of Rural Development.
  • The report includes many useful recommendations on NFBS. Some of them influenced the revised NSAP guidelines formulated in 2014.
    • For instance, eligibility for NFBS assistance was extended in case of the death of adult women (in the age group of 18-60 years) who work at home. No financial provision, however, was made for this extension.
  • The main recommendations of the task force on NFBS, including higher coverage and benefits, were simply ignored.

Reviving and revamping NFBS is not rocket science. Three or four steps are essential

  • First, a big increase in the amount of emergency assistance (initially Rs 10,000, raised to Rs 20,000 in 2012) is long overdue.
  • Second, there is a strong case for removing the restriction to BPL households. As is well-known, BPL lists are outdated, unreliable, and full of exclusion errors in most states.
  • Third, the NFBS formalities are crying for simplification, transparency, and people-friendliness. As things stand, the main responsibility for identifying eligible families rests with the gram panchayat or municipality. 
  • Last but not least, none of this is possible without a major increase in the NFBS budget.

Conclusion

  • The absence of any form of life insurance appropriate for poor households is a gaping hole in India’s budding social security system. A revamped NFBS could serve that purpose to some extent. This would make a big difference for people like Hiravati and her children.

Case Study for Essay /Ethics

  • After Rohit Turi, a migrant worker from Latehar district in Jharkhand, died of a sudden accident in Kerala last year, his wife Hiravati’s world collapsed. From a young mother looking forward to a better life as her husband worked hard for the family, she turned into a destitute widow who is wondering how to feed her children. As a widow, she is eligible for a social security pension, but it may take years for a pension to be sanctioned, if it happens at all. Meanwhile, she is struggling to make ends meet.

Source: IE

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