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 5th 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.