India’s notable social security scheme, ‘Atal Pension Yojana’ (APY), has attained a significant milestone by completing its five years of operation. The scheme has managed to amass more than 2.2 crore subscribers during this period.
APY: A Comprehensive Social Security System
Launched on 9th May, 2015, APY serves as a robust social security system for the Indian citizens. It primarily focuses on providing support to the underprivileged sections, the economically disadvantaged, and the workers from unorganised sectors. The objective is to offer a universal social security system that benefits every individual in the society.
APY Administration
The administrative duties of APY are carried out by the Pension Fund Regulatory and Development Authority (PFRDA). This is processed through the framework provided by the National Pension System (NPS).
APY Eligibility Criteria
The APY scheme encompasses every citizen of India aged between 18 and 40 years. However, the contribution levels vary according to the joining age of the subscriber. Early joiners benefit from lower contribution levels, while those who join at a later stage contribute at higher rates.
Perks of APY
Subscribers of APY are guaranteed a minimum pension ranging from Rs. 1,000 to Rs. 5,000 after reaching 60 years of age. In case of the subscriber’s demise, the spouse continues to receive the pension for a lifetime. If both the subscriber and spouse die, the total pension corpus is forwarded to the nominee.
Tax Benefits of APY
Investments made towards APY are eligible for similar taxation advantages as the National Pension System (NPS).
APY Effectiveness Analysis
The implementation of APY extends across the entire nation, covering all states and Union Territories. The male to female subscriber ratio stands at 57:43. Despite the extensive reach of the scheme, only 5% of the eligible population is currently under APY.
About Pension Fund Regulatory and Development Authority (PFRDA)
PFRDA is a statutory authority, established by a Parliament act to regulate and promote the orderly growth of the National Pension System (NPS). It operates under the Department of Financial Services within the domain of the Ministry of Finance.
National Pension System (NPS)
The Government-sponsored pension scheme, NPS, was initially launched in 2004 for government employees. Over time, its coverage has expanded to include every Indian citizen (both resident and non-resident) aged between 18 and 65 years.
