New Delhi: The government wants to increase the pension limit under the Atal Pension Yojana, meant for those in the unorganised sector, to up to Rs 10,000 per month after an apparent late realisation that Rs 5,000 per month may not be enough in the twilight years.
“We have seen the proposal (sent by the PFRDA) of increasing the pension value to (up to) Rs 10,000 per month and it is under our active examination,” Madnesh Kumar Mishra, joint secretary, department of financial services (DFS), said at a conference organised by the PFRDA.
The APY is a centrally-sponsored social security scheme administered by the Pension Fund Regulatory and Development Authority (PFRDA) through the National Pension System (NPS).
This scheme is primarily meant for citizens in the unorganised sector such as maids, drivers, plumbers, carpenters and gardeners.
If such a proposal goes through, an individual will be able to invest in the APY to earn a pension of Rs 10,000 per month after maturity. At present, APY offers pre-defined returns, ranging from Rs 1,000 per month to Rs 5,000 per month.
The Pension Fund Regulatory and Development Authority (PFRDA) chairman, Hemant G. Contractor, said the proposal has been sent to the finance ministry with a view to increasing the subscriber base of the APY.
“Currently, we have five slabs of pension from Rs 1,000-5,000 per month. There have been a lot of feedback from the market asking for higher pension amounts because many people feel that Rs 5,000 at the age of 60, 20-30 years from now, will not be sufficient. We have placed this proposal with the government that it should be increased to up to Rs 10,000,” Contractor said.
The PFRDA has sent two more proposals to the ministry – automatic enrolment for the APY and raising the age bar to enter the scheme to up to 50 years.
At present, the age of entering the APY is from 18-40 years but an increase by another 10 years – from 18-50 years – will help in expanding the subscriber base, he added.
The scheme was launched in May 2015 and has a subscriber base of 1.02 crore. Till date, the APY has collected Rs 3,950 crore in contributions from subscribers. The scheme has generated around 9.10 per cent compounded annual growth rate (CAGR) since inception till March 2018.
The PFRDA added about 50 lakh subscribers under the scheme in 2017-18 and hopes to add another 60-70 lakh in the ongoing financial year.