Finance Minister Arun Jaitley today relaunched an insurance scheme for senior citizens that will provide monthly pension ranging from Rs 500 to Rs 5,000.
The revived scheme would be available between August 15, 2014 and August 14, 2015 for the benefit of citizens aged 60 years and above. It will provide financial security by ensuring regular income during their advancing years, a Finance Ministry statement said.
The scheme would be administered by LIC.
"VPBY (Varishtha Pension Bima Yojana) will benefit the vulnerable section of society with limited resources as it will provide monthly pension ranging from Rs 500 to Rs 5,000 to senior citizens of the country," Jaitley said.
The minimum investment (purchase price) for the scheme would be Rs 66,665 and the maximum is over Rs 6.66 lakh. The pension will start from next year of purchase of insurance.
The full purchase price will be refunded to the nominee in case of dealth of the insured.
Varishtha Pension Bima Yojana (VPBY), introduced earlier in 2003-04 by then NDA Government, covered 3.83 lakh senior citizens. LIC collected Rs 7,100 crore under the scheme.
The Finance Minister hoped LIC will cover a much larger number of people this time.
This initiative reflects the commitment of the government to the welfare and well-being of the senior citizens of the country, which is especially important in light of the increasing longevity in India, which has gone up substantially, the statement added.
The subscription to the scheme is likely to create a corpus of more than Rs 10,000 crore, and would thus also be a significant source of resource mobilisation for the development of the country.
"In case of VPBY, the beneficiary gets an income at the overall rate of 9.38 per cent per annum on their deposits as they are being paid on monthly basis," Jaitley said.
"In this era of volatile interest rate, this scheme would provide senior citizens a fixed return for rest of their life," he said.