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Economically Weaker Sections (EWS)

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Economically Weaker Sections (EWS) is a term used to refer to those citizens or households with income below a certain threshold level. Though there may be other economic factors in deciding on the economic weakness of the citizen/household, income is the dominant criterion.  In public policy domain the term has to be appreciated in the context of the Preamble to India’s Constitution which seeks Justice- social, economic and political. (See Original Text  at page 7 of India's Constitution))

This categorisation as EWS is distinct from other categories like “disadvantaged sections” which refer to those belonging to the Scheduled Caste/ the Scheduled Tribe /other socially backward communities who may be having a disadvantage owing to social, cultural, geographical, linguistic, gender or such other factors.

However, the definition of EWS may include those categorised as “Below Poverty Line (BPL)”.

There is no coherent single / unique definition for EWS in India. It is defined differently for different schemes run by the Government. Further, state and central (Union/Federal) governments may set different criteria for deciding on the EWS status. Governments periodically review and re-fix income ceiling levels for Economically Weaker Sections (EWS) to keep it relevant and contemporary.

Generally EWS status is confirmed based on the Income certificate issued by a Revenue Officer not below the rank of Tehsildar (Taluk office in-charge), BPL Ration card or Antodya Anna Yojna Ration Card (a ration card issued to the poorest of the poor) or Food Security Card issued by the state government concerned. In some places a legal affidavit is taken for the issue of EWS certificate.

The criterion of EWS is evoked while granting benefits under education or housing.

 

Some of the definitions of EWS adopted by Central /State Governments
For instance, Interest Subsidy for Housing the Urban Poor Scheme (ISHUP) was conceived by the central government in 2009 for providing interest subsidy on housing to urban poor to make the housing affordable and within the repaying capacity of EWS and Low Income Groups (LIG). The scheme encourages poor sections to avail of loan facilities through Commercial Banks/ Housing and Urban Development Corporation (HUDCO) for the purposes of construction of houses and to avail 5% subsidy in interest payment for loans upto Rs. 1 lakh. Under this ISHUP Scheme, EWS were classified in 2009 as Households with monthly income of upto Rs 3,300 (or 39600 /annum) while those with monthly income between Rs 3,300 and Rs 7,300 were termed as LIG. Government, later in 2010, revised the income ceiling in respect of Economically Weaker Sections (EWS) from the earlier limit of ‘upto Rs. 3300’ to ‘upto Rs. 5000’ or Rs. 60,000 a year and for LIG to Rs. 10,000 from Rs. 5,001. On 14 November 2012 this was further revised such that urban poor having an annual household income of up to Rs. 1 lakh were classified as EWS and those falling between Rs. 1 lakh and 2 lakhs were categorized as Low Income Group (LIG). The revised criteria, has been approved based on growth in per capita income, minimum wages for non-agriculture workers, monthly per capita expenditure, National Housing Bank’s Residential Price Index, and Consumer price index & consumer food price index.

Rajiv Rinn Yojana (RRY) has been formulated by modifying the Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) piloted in the 11th Plan period with enhanced scope and coverage. RRY is a Central Sector Scheme applicable in all the urban areas of the Country. RRY is an instrument to address the housing needs of the EWS/LIG segments in urban areas as well as to channelize institutional credit to the poorer segments of the society thereby, increasing home ownership in the country. Rajiv Rinn Yojana is effective from October 1, 2013. RRY provides for interest subsidy of 5% (500 basis points) on loans granted to EWS and LIG categories to construct their houses or extend the existing ones. The upper limit for loan is Rs 5 lakh for EWS and 8 lakh for LIG (interest subsidy would, however, be limited to the first Rs 5 lakh of the loan amount, in case the loan exceeds this amount). Under RRY, Economically Weaker Section (EWS) is defined as households having an average annual income up to Rs. 1,00,000/- while Low Income Group (LIG) is defined as households having an average annual income between Rs.1,00,001/- and up to Rs.2,00,000/-. More details on RRY may be seen here.

Under the new Housing Scheme – Prime Minister’s Awaaz Yojna launched in 2015 with the aim of providing Housing for all by 2022, EWS households are defined as households having an annual income of up to Rs.3,00,000. States/UTs have the flexibility to redefine the annual income criteria as per local conditions in consultation with the Centre. The mission supports construction of houses upto 30 square meter carpet area with basic civic infrastructure, to be registered preferably in the name of the female head. The mission seeks to address the housing requirement of urban poor including slum dwellers through following programme verticals:


Under Section 2 (e)  of
Right to Education Act, (The Right Of Children To Free And Compulsory Education Act, 2009) a "child belonging to weaker section" means a child belonging to such parent or guardian whose annual income is lower than the minimum limit specified by the appropriate Government, by notification; For instance, Delhi Government has specified the EWS child as a child resident in Delhi for the last three years with annual parental income of less than Rs. 1 lakh. They are given 25% reservation in seat allotments. On the other hand, Andhra Pradesh has fixed the income ceiling at Rs. 60000. Various definitions of EWS adopted by various states for the purposes of implementing Right to Education may be seen here.

The Central Government is implementing the Central Sector Plan Scheme titled “Scheme on Interest Subsidy on Educational Loans from scheduled Banks for professional education of students from economically weaker sections” for providing full interest subsidy during the period of moratorium (i.e. duration of a recognised professional course plus one year) on educational loans availed by students belonging to economically weaker sections whose annual income is not more than Rs.4.5 lakhs.

Patients belonging to the economically weaker sections (EWS) are referred to identified private hospitals in Delhi for being provided with free treatment, particularly when such hospitals were set up on land obtained under concessional terms from the government[1]. For the purposes of this, EWS is defined as those with monthly income upto or less than Rs. 8086/-.

 

The Union Budget for 2016-17 presented on 29.02.2016 announced that “Government will launch a new health protection scheme which will provide health cover up to Rs. One lakh per family belonging to poor and economically weak families”. For Senior Citizens of age 60 years and above, an additional top-up package up to Rs. 30,000 per senior citizen per year, got implemented w.e.f 01.04.2016. The Scheme is proposed to be launched w.e.f. 01.04.2017 and the details are awaited.

Economically Backward Classes (EBCs)
A concept similar to EWS used in India, is Economically Backward Classes (EBC). Citizens having annual income less than Rs.1 lakh and who do not belong to any social category such as Schedule Caste, Schedule Tribe and Other Backward Classes (SC/ST/OBC) have been categorized as Economically Backward Classes (EBCs). For instance, the term EBC is adopted in Dr. Ambedkar Post-Matric Scholarship for the Economically Backward Class Students (Centrally Sponsored Scheme) which is effective from 2014-15. Under this scholarships are given to Indian nationals belonging to General Category whose total income from all sources of the employed candidate or his/her parents/guardians in case of unemployed candidate does not exceed Rs.1 lakh per annum. Another scheme launched alongside this, Dr Ambedkar Central Sector Scheme of Interest Subsidy on Educational Loans for Overseas Studies for Other Backward Classes (OBCs) and Economically Backward Classes (EBCs) also adopts the same definition for EBC.

The Central Government had set up a Commission for the Economically Backward Classes in January, 2004. The Commission was reconstituted on 03.03.2005. The revised terms of reference of the Commission were as follows:


The Commission for the Economically Backward Classes submitted its Report to the Government (Ministry of Social Justice and Empowerment) on 22.7.2010[2]. The aforementioned scholarship schemes were launched for EBCs subsequent to the submission of this report.

 

International Experience
Many Governments target benefits to the economically weaker sections of the society. For instance, in the US Small Business Act, a woman is presumed economically disadvantaged “if she has a personal net worth of less than $750,000, her adjusted gross yearly income averaged over the three years preceding the certification does not exceed $350,000, and the fair market value of all her assets (including her primary residence and the value of the business concern) does not exceed $6 million”. Thus, in addition to income, the US Act resorts to networth and asset /wealth status of the person for deciding on their economic weakness.


1. Source: PIB release dated 16 December 2014 and 11 February 2014; Health is a State Subject; it is the responsibility of the State Governments to ensure that proper treatment is provided to the poor in their States. For instance, as far as National Capital Territory (NCT) of Delhi is concerned, the Nursing Homes/Private Hospitals in Delhi registered as per the provisions laid down under Delhi Nursing Homes Registration Act, 1953 and Rules (Amendment) made thereunder and which were allotted land at concessional rates by land allotting agencies are providing free treatment to the eligible patients of economically weaker section (EWS) category. There are 45 such functional identified private hospitals which were allotted land at concessional rate by land allotting agencies. They have been providing free treatment to the extent of 10 % IPD and 25% of total OPD, completely free of any charges, to the eligible patients of EWS category whose monthly income is upto or less thanRs.8086/-.

2. Source: Annual Report 2013-14 of Department of Social Justice & Empowerment


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