Atal Pension Yojana- 5-year journey of this massive scheme

Designing social security schemes in accordance with the changing demographic pattern has always been a challenging task. It becomes even more herculean for a country like India where population is humongous and socio-economic conditions vary from state to state. Increasing longevity and declining fertility rate pose new sets of challenges for catering to the needs of the aging population which is increasing rapidly. The UN Population Report 2019 estimates that by 2050, one among five Indians would be 60 years or above which is double the present number of one among ten. It is needless to mention that major portions of the working population in India are in the unorganized sector where formal arrangements for old age income security are absent. Bringing the entire working population, especially the unorganised sector, under the ambit of pension is very crucial for enhancing social security and in dealing with the real challenges expected to be faced not-too-distant.

Thus, five years ago on May 9, 2015 for addressing this impending issue, Prime Minister Narendra Modi announced the launch of a Government backed minimum guaranteed pension scheme ‘Atal Pension Yojana’ (APY), which has evolved as a flagship social security scheme of the Government of India for providing old age income security particularly to the workers in unorganised sector. The scheme has successfully completed five years of existence and its relevance remains unequivocal even after covering 2.23 crores workers under the ambit of pension. The magnificent journey of APY in expanding the pension coverage has been overwhelming since its launch and notably, 69 lacs subscribers were enrolled in the last financial year alone. Apart from encouraging enrolments, the scheme was implemented comprehensively across the country having subscriber coverage from all states and UTs with male to female subscription ratio of 57:43.

This feat of pension coverage in the unorganized sector was possible only with the undaunted efforts of all the stakeholders involved mainly the distribution channels viz. Public Sector Banks (PSBs), Regional Rural Banks (RRBs), Private Sector Banks including Payments Banks and Small Finance Banks and Department of Post (DoP). The commendable institutions who aided in reaching out to the most vulnerable sections of the society are State Bank of India (SBI), Bank of India, Indian Bank, Canara Bank, Bank of Baroda, Axis Bank, HDFC Bank, Airtel Payments Bank and all Regional Rural Banks. Needless to mention, State Level Banking Committee forums have also been supportive in ensuring an inclusive coverage in their respective geographical jurisdictions.  

The uniqueness of Atal Pension Yojana is characterized by its triple benefits. First, it provides a minimum guaranteed pension ranging from Rs 1000 to Rs 5000 in multiple of Rs 1000 depending upon the selected pension slab on attaining the age of 60 years till he/she is alive. As a second benefit, the same amount of pension is guaranteed for lifetime to the spouse on the death of the subscriber. Third, in the event of death of both the subscriber and the spouse, full pension corpus shall be returned to the nominee. In addition to these benefits, the scheme provides operational flexibilities in terms of frequency of contribution, selection of pension amount and selection of APY-Service Provider.

Recognizing changing socioeconomic and technological environments, progression of the scheme becomes essential for remaining relevant to the targeted segment and accomplishing the scheme objectives. In 2016, facility for upgrading or downgrading of pension slab by subscriber was permitted and now this facility is available throughout the year. APY Mobile App was launched in 2017 for enabling subscribers to access their APY account anytime. And recently, contributions towards APY has been deferred by three (3) months till June 2020 to address the current scenario of Covid-19 pandemic. Anticipating the aspirations of a pensioned society, submissions have been made to the Government for increasing the maximum pension amount to Rs 10,000 and the age of joining to 50 years for APY.    

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Notwithstanding these achievements, complacency hardly sets in as there are approximately 45 crore population (in 18-40 years age group), which is eligible for pension coverage and APY has been able to achieve only five per cent (5%) till date. Moreover, inspiring subscribers to contribute regularly to their APY account and upscaling new enrollments are the instant twin objectives of PFRDA. The journey that we have embarked upon in 2015 to make India a pensioned society though seems far ahead, we are confident that we will be able to complete the journey with the commitment and dedication of all the stakeholders.
 
By Supratim Bandyopadhyay, Chairman, PFRDA (Pension Fund Regulatory & Development Authority).