Lifelong Pension Promise for India’s Unorganised Sector

Major milestone crossed

Lifelong Pension Promise for India’s Unorganised Sector: The Atal Pension Yojana (APY) has crossed 8 crore total gross enrolments, marking a major success in India’s pension inclusion drive. The scheme has shown consistent yearly growth, especially in Tier 2 and Tier 3 towns, reflecting its increasing acceptance among low-income earners.

Designed for unorganised workforce

Launched to protect the unorganised workforce, APY addresses two main challenges: longevity risk and lack of retirement income. It offers financial security in old age, especially for those without employer-supported pension schemes.

Static GK fact: Over 90% of India’s workforce is in the unorganised sector, lacking social security benefits.

Who can join the scheme

Eligibility is open to all Indian citizens with bank accounts aged between 18 and 40 years. However, only non-income taxpayers are allowed to enroll. This condition ensures the scheme primarily serves economically weaker sections.

Static GK fact: The scheme was launched in 2015 under the National Pension System framework.

Monthly pension guarantee

APY guarantees a fixed monthly pension ranging from ₹1,000 to ₹5,000, starting at the age of 60. The pension amount depends on the subscriber’s age and contribution. The government ensures that the promised pension is delivered.

How it is managed

The scheme is regulated by the Pension Fund Regulatory and Development Authority (PFRDA) under the Ministry of Finance. Contributions are auto-debited from the subscriber’s bank account, making it simple and efficient.

Static GK Tip: PFRDA was established in 2003 and manages both the National Pension System (NPS) and APY.

Government contribution and tax status

Initially, the government contributed 50% of the total contribution or ₹1,000 per annum, whichever was lower, for eligible subscribers. However, this benefit was only for a limited period and has now ended. Currently, there are no tax benefits under APY, and income taxpayers are barred from joining.

Financial inclusion and awareness

The scheme has helped increase financial inclusion, especially among the rural population. Awareness drives by banks, post offices, and financial literacy programs have played a key role in expanding coverage.

Future outlook

With its low contribution and guaranteed pension, APY remains a vital pillar of India’s social security framework. The next goal is to bring in more young subscribers early so they contribute longer and receive higher pensions.

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Lifelong Pension Promise for India’s Unorganised Sector: