Relief for the Elderly

 What are the key takeaways for senior citizens in this budget 2018 - 19?

• Exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000 to Rs. 50,000.
• TDS not required to be deducted under section 194A. Benefit also available for interest from all fixed deposit schemes and recurring deposit schemes.
• All senior citizens will now be able to claim benefit of deduction up to Rs. 50,000/- per annum in respect of any health insurance premium and/or any general medical expenditure incurred.
• Raised the limit of deduction for medical expenditure in respect of certain critical illness from Rs. 60,000/- in case of senior citizens and from Rs. 80,000/- in case of very senior citizens, to Rs. 1 lakh in respect of all senior citizens, under section 80DDB.

National Health Protection Scheme 

• The second flagship programme under Ayushman Bharat is National Health Protection Scheme, which will cover over 10 crore poor and vulnerable families (approximately 50 crore beneficiaries) providing coverage upto 5 lakh rupees per family per year for secondary and tertiary care hospitalization.

What is the scheme Pradhan Mantri Vaya Vandana Yojana all about ?

• PMVVY is a Pension Scheme announced by the Government of India exclusively for the senior citizens aged 60 years and above.
• The Scheme can be purchased offline as well as online through Life Insurance Corporation (LIC) of India which has been given the sole privilege to operate this Scheme.

Major Benefits 

• Scheme provides an assured return of 8% p.a. payable monthly (equivalent to 8.30% p.a. effective) for 10 years.
• Pension is payable at the end of each period, during the policy term of 10 years, as per the frequency of monthly/ quarterly/ half-yearly/ yearly as chosen by the pensioner at the
  time of purchase.
• The scheme is exempted from Service Tax/ GST.
• On survival of the pensioner to the end of the policy term of 10 years, Purchase price along with final pension instalment shall be payable.
• Loan up to 75% of Purchase Price shall be allowed after 3 policy years (to meet the liquidity needs). Loan interest shall be recovered from the pension instalments and loan to be recovered from claim proceeds.
• The scheme also allows for premature exit for the treatment of any critical/ terminal illness of self or spouse. On such premature exit, 98% of the Purchase Price shall be refunded.
• On death of the pensioner during the policy term of 10 years, the Purchase Price shall be paid to the beneficiary.

What are the constraints and limitations?

• Inadequate Funding - The allocation for RSBY rose to Rs.2000 crores in the financial year 2019 from Rs. 470 crores. Based on the experience of RSBY, it is estimate that new scheme with the huge coverage is expected to cost about Rs. 30,000 crores.
• It is doubtful that whether the states with their limited resources will be able to provide the expected 40 percent share.
• There is not enough clarity regarding the implementation mechanism but it appears that states will be given an option to implement it through insurance agencies or by funding the autonomous bodies.
• Insurance companies are not likely to find attractive enough at the envisaged funding level.
• According to NSSO Sample survey data because of the RSBY scheme only 1.2 percent of the rural and 6.2 percent of urban families are benefitted and the scheme did b=not reduce the out of pocket expenditure incurred by the families.
• The new scheme provides only hospitalisation expenses but more than two thirds of the treatment expenses are incurred by families are other that hospital expenses.
• As for the elderly, BKPAI survey shows that only 10 percent of the elderly were hospitalised during one year preceding the survey.
• The new scheme provides only hospitalisation expenses but majority of the elderly suffer from age related diseases like Arthritis and diseases like hypertension, diabetes and various types of fevers where proper diagnosis and monitoring is required.
• Shortage of medical man power in the rural remote and tribal areas is a big constrain for the effective functioning of this program.

By: VISHAL GOYAL