The Budgetary announcement by the interim finance minister Piyush Goyal, about a new pension scheme, Pradhan Mantri Shram Yogi Mandhan, for the unorganised sector workers,has put a big question mark on the continuity and growth of government's existing flagship pension scheme, Atal Pension Yojana, almost targeted for the same segment of the population.
The new scheme, promising Rs 3,000 per year pension, will benefit around 42 crore workers in the sector, Goyal said while presenting the interim Budget on Feb 1. .
APY, previously known as Swavalamban Yojana, was announced in the 2015 Budget speech by Finance Minister Arun Jaitley.
Hemant Contractor,chairman, PFRDA, that runs the APY, said,“It is too early to comment on the new government scheme as details are not known. Prima facie, the new scheme will compete with APY, but nothing more can be said now.''
“The new pension scheme has the government as a 50 per cent co-contributor which is not there in the APY. So, people will prefer the new pension scheme to APY. Moreover, PFRDA had requested the government to increase the age limit under APY to 50 years from 40 years, which didn't happen. So, we will have to revise the APY target.Still APY makes a difference in that it has got five features, unlike the newly announced scheme,’’ explained Contractor.
As of now, APY has got a subscriber base of 1.46 cr , said added Contractor and the total corpus of New Pension Scheme (NPS) was at Rs 2.95 lakh crore which may cross Rs 3.10 lakh crore by the fiscal-end.
On Pradhan Mantri Shram-Yogi Maandhan, Goyal explained, "An unorganised sector worker joining new pension yojana at the age of 29 years will have to contribute only Rs 100 per month (Or, Rs 1200 per year) till the age of 60 years."
Similarly, a worker joining the pension yojana at 18 years, will have to contribute as little as Rs 55 per month (Or, Rs 660 total yearly investment) only.
In Pradhan Mantri Shram-Yogi Maandhan, Goyal said that the Government will deposit equal matching share in the pension account of the worker every month.
"It is expected that at least 10 crore labourers and workers in the unorganised sector will avail the benefit of 'Pradhan Mantri Shram-Yogi Maandhan' within next five years making it one of the largest pension schemes of the world," Goyal said adding that a sum of Rs 500 crore has been allocated for the scheme and additional funds will be provided as needed.
The scheme will also be implemented from the current year.
APY, in which all subscribing workers below the age of 40 are eligible for pension of up to ₹5,000 (US$70) per month on attainment of 60 years of age. The minimum age of joining APY is 18 years and maximum age is 40 years,
This scheme is be linked to the bank accounts opened under the Pradhan Mantri Jan Dhan Yojana scheme and the contributions is deducted automatically..