The central government on Wednesday approved three pension schemes that would benefit people in the unorganised sector, moving a step closer towards introducing a universal social security system in the country.
The union cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the operationalisation of the Atal Pension Yojna (APY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Pradhan Mantri Suraksha Bima Yojana (PMSBY).
The meeting also approved the extension of funding support for implementing the APY and apprised the cabinet on the operationalisation of the PMJJBY and the PMSBY.
It was also decided to provide Rs50 crore annually for the next five years as government contribution for publicity / awareness creation related expenditure for PMJJBY and PMSBY.
Under the APY, subscribers will receive a fixed minimum pension of Rs1,000 per month in muliples of thousands upto Rs5,000 per month, at the age of 60 years, depending on their contributions, which would vary depending on the age of joining the APY.
The central government would also co-contribute 50 per cent of the total contribution or Rs1,000 per annum, whichever is lower, to each eligible subscriber account, for a period of five years, that is, from 2015-16 to 2019-20, to those who join the NPS before 31 December 2015 and who are not members of any statutory social security scheme and who are not income tax payers.
The pension would also be available to the spouse on the death of the subscriber and thereafter, the pension corpus would be returned to the nominee. The minimum age of joining APY is 18 years and maximum age is 40 years. The benefit of fixed minimum pension would be guaranteed by the government.
Under PMJJBY, annual life insurance of Rs2 lakh would be available on the payment of premium of Rs330 per annum by the subscribers. The PMJJBY will be made available to people in the age group of 18 to 50 years having a bank account from where the premium would be collected through the facility of "auto-debit".
Under PMSBY, the risk coverage will be Rs2 lakh for accidental death and full disability and Rs1 lakh for partial disability.
The scheme will be available to people in the age group 18 to 70 years with a bank account, from where the premium would be collected through the facility of "auto-debit".
Government expenditure is expected to range between Rs2,520 crore and Rs10,000 crore on account of co-contribution to subscribers of the APY over a period of five years.
Further, an expenditure of Rs2,000 crore for promotional and developmental activities for enrolment and contribution collection under APY and Rs250 crore for publicity, awareness building for PMJJBY and PMSBY is envisaged by the government, over a period of five years.
It is expected that around 20 million subscribers would be enrolled during the current financial year under APY.
These schemes are part of the government's programme of creating a universal social security system for all Indians, specially the poor and the under-privileged, to address longevity risks among workers in the unorganised sector and to encourage workers in the unorganised sector to voluntarily save for their retirement.
Such workers constitute 88 per cent of the total labour force of 472.9 million, according to the 66th round of NSSO Survey of 2011-12.