To improve gender parity, the government plans to engage women self-help groups under Atal Pension Yojana (APY), the government run pension scheme for the unorganised sector, Minister of State for finance Shiv Pratap Shukla, said in New Delhi on Tuesday.
The government also plans to raise the APY pension limit from the existing Rs 5,000 per month to Rs 10,000 per month and is considering to increase the age of beneficiaries by 10 more years, taking the upper age limit from 40 years to 50 years.
“The changes in the social and demographic structure of the Indian society make it more important for the unorganised sector to join the pension scheme. Self-help groups need to be leveraged to improve coverage and persistency of subscribers’ involvement in Atal Pension Yojana,” said Shukla, while addressing the National Atal Pension Yojana Conference.
The conference was organised by the Pension Fund Regulatory and Development Authority (PFRDA).
Launched in May 2015, the Atal Pension Yojana currently has one crore subscribers with assets under management of Rs 4,148 crore. However, only 40 per cent of the subscribers are women. The proposed plan is to take the women’s subscriber base to 50 per cent.
APY is the first guarantee pension scheme to provide 8 per cent return during the accumulation phase and 7 per cent return during the de-accumulation phase. “This translates into a big assurance by the government,” says Supratim Bandopadhyay, Whole Time Member (Finance) at PFRDA.
Bandopadhyay said that electronic enrollment should be encouraged to achieve the annual target of new subscribers.
About 9 per cent or 110 million people of India’s population will cross 60 years of age by 2030, one of the fastest growing demographics in the country. This figure is expected to soon touch 180 million.
“A large section of the society does not have any access to pension and this is a cause of concern,” Hemant G Contractor, PFRDA Chairman said.
At present, less than two per cent of the country’s eligible population (18-40 years) is covered under the APY scheme.
That’s because a majority of the country’s pension products target the organised sector, or working professionals. The current linking of the Atal Pension Scheme with Aadhaar, will provide a fillip and banks will be able to improve coverage by effectively utilising the digital platform, Contractor said.
Several banks are already working with women self-help groups to broaden the base of pension subscribers. Madnesh Kumar Mishra, Joint Secretary, Department of Financial Services, Ministry of Finance, said that tangible benefits have to be provided to make the pension scheme attractive to prospective subscribers.