India ageing gradually, every 5th person to be 60+ by 2050 – CRISIL, PFRDA

As per a joint report titled “Financial Security for India’s Elderly—The Imperatives” from CRISIL and pension regulator Pension Fund Regulatory and Development Authority (PFRDA), by 2050 every 5^th Indian will be in their 60s as against every 12th at present.

Highlights of “Financial Security for India’s Elderly—The Imperatives” Report:

Currently 9% of Indian population is above the age of 60, which will rise to 19.4% by year 2050.

• Considering the current situation as an ideal one, PFRDA has highlighted the need to develop the under-penetrated pension market in India.
• PFRDA Chairman Hemant G Contractorhas mentioned that promotion and development of a pension system will accomplish several objectives viz. providing income security to the ageing population, pooling long-term funds for growth-driving sectors of Indian economy and will also boost the liquidity in capital market.
• Currently, only 14% of domestic savings are placed in pension and provident funds. Major chunk of this comes from organised section.
• The report has identified that increasing the penetration of pension products via voluntary pension schemeshas been the biggest challenge due to the huge size of the unorganised sector.
• Referring to Atal Pension Yojana, the report mentioned that out of 47 lakh subscribers, almost 49% have subscribed for Rs 1,000 pension (lowest range) and about 37% for Rs 5,000(highest range).The report inferred that despite pension amounts being low, people are not able to afford these contributions.
• The report has recommended that Government should consider including personal finance and retirement planning as a part of the formal education curriculumin order to improve financial literacy.

About Atal Pension Yojana (APY):

Atal Pension Yojana is a guaranteed pension scheme, launched by Prime Minister Narendra Modi on May 9, 2015. It became operational from June 1, 2015.

• It is administered by Pension Fund Regulatory and Development Authority (PFRDA).
• All Indian citizens in the age group of 18-40 years are eligible to subscribe for this scheme.
• Depending on the age at entry and amount of contribution, every subscriber will get a guaranteed pension in the range of Rs. 1000 – Rs. 5000 per month after he/she attains the age of 60 years.
• Till date, about 47 lakh subscribers have registered for this scheme.