India needs to evolve into a pensioned and insured society, Finance Minister Arun Jaitley said today even as he maintained that people will have more room to invest for their future as the income levels increase.
Conventionally it was considered that only in the structured government employment, pension was the responsibility of the state, he said.
"But the state resources also have their limitations. Therefore, the evolution of the whole concept of pension and its expansion today is the kind of evolution you have to invest in your future," he added.
Speaking at the Annual Conference on Pension, organised by the Pension Fund Regulatory and Development Authority (PFRDA), Jaitley said: "As the income increases, your ability to take out a part of your income and invest for safer future is also going to be important."
Releasing a Crisil report on Financial Inclusion and Pension in India, he said that even though it has indicated that the country has come a long way, it is still far away from where it should be today.
"In the last few years, we have been making conscious efforts by the government also to nudge this whole process. But we are still far away from where we should be and if we don't catch up in accordance with the requirement of the society, a day would not be far when we are faced with serious challenges of large sections of our senior citizens who are devoid of any security," he added.
He said that going by recent indication, India's growth will be reasonably higher compared to other countries of the world.Individual incomes are going to increase and therefore will be more scope to invest for secure retirement, he added.
PFRDA Chairman Hemant G Contractor said that his office is considering an auto enrolment system under the National Pension System (NPS) with an element of soft compulsion, in which all the employees working in government identified sector/industries in unorganised sector would be automatically covered unless they choose to opt out.
He said PFRDA will ensure to take all steps to increase the outreach of NPS and Atal Pension Yojana (APY) to meet the mandate under PFRDA Act.