Atal Pension Yojana

The scheme was launched in 2015 as an upgrade of Swavalamban Scheme with the objective of extending the old age social security coverage amongst the workers in unorganized sector (which is 88% of the working population).

Important Features

• Anyone in the age group of 18-40 years can join the scheme provided he/she is a citizen of India and has an active bank account.
• Minimum contribution for 20 years is mandatory.
• A periodic contribution of 1000-5000 could be made (depending upon the pension wanted post retirement).
• The scheme also promises a co-contribution by Central Government of 50% of the total prescribed contribution by a worker, up to Rs. 1000 per annum, but only to those who joined APY before December 31, 2015. Further, this co-contribution would be made only for 5 years, from FY 2015-16 to 2019-20 in the eligible cases subject to conditions mentioned below.

Lacunae/Drawbacks

• If a person who is running Atal Pension Yojana dies before the age of 60, the nominee will only get only the deposited amount. This amounts to fraud.
• There’s no automatic renewal i.e. every year one will have to manually renew the scheme into their bank to continue.
• It is only for those who are not enrolled in other pension schemes like EPF, EPS. The lower grade employees do need alternate social security option to sustain happily post-retirement.
• After 2015, no 50% contribution from the government.

Suggestions

• The government must universalize it to cover lower grade employees from organized sector.
• The 50% contribution by the state must be continued.
• The rate of return be revised as in parallel options (NPS, equity funds), the subscriber is getting better returns.
• The government must cover up the loopholes/deficiencies in the existing framework, if needed it should revamp the existing structure and build the new one around the idea of ‘Universal Social Security’.