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 after retirement).
  • It 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 only.

Performance

Since its inception has been substantive with 3.68 crore enrolments. In financial year 2021-22 more than 65 lakh subscribers have enrolled which is the highest ever enrolment during the same period since the launch of scheme.

  • Out of the total enrolments under APY as on 25th August 2021, nearly 78% subscribers have opted for Rs 1,000 pension plan while around 14% for Rs 5,000 pension plan.
  • Around 44% are female subscribers and also around 44% subscribers getting enrolled are very young and belong to the age-group of 18-25 years.

Issues

  • It has limited government contributions for only a period of 5 years.
  • It does not provide easy exit options to the beneficiaries, who are mostly unorganized sector workers.
  • Benefits of the scheme have not been indexed to inflation.
  • It has severe penalties for discontinuities in making pension contributions.
  • Regular contributions are difficult for those without regular salaried jobs.

Possibilities and Prospects

  • Continuous valuations of the scheme must be carried out to make the scheme sustainable for such a long period of time.
  • 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 Financial Inclusion and Universal Social Security.

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