In a move to bolster social security benefits, the government is likely to double the minimum guaranteed pension under the Atal Pension Yojana (APY) to Rs 10,000, sources said. The proposal, currently in its final stages of approval, is expected to be announced in the upcoming Union Budget 2025 on February 1.
“The proposal to double the minimum guaranteed amount to Rs 10,000 is in final stages. It’s almost agreed upon. It is likely to be announced in the Budget,” a government official told Moneycontrol.
With the likely increase in the minimum pension amount, the scheme is set to provide greater financial stability and security to India’s vulnerable sections, he said.
What is Atal Pension Yojana?
Launched on May 9, 2015, by Prime Minister Narendra Modi, the APY is a flagship social security scheme aimed at providing old-age income security, particularly to the poor, underprivileged, and workers in the unorganised sector. Named after former Prime Minister Atal Bihari Vajpayee, the Atal Pension Yojana aims to strengthen financial inclusion and provide a safety net for those without access to formal retirement benefits.
Currently, the scheme guarantees a monthly pension ranging from Rs 1,000 to Rs 5,000, after the age of 60, based on the subscriber’s contribution.
As of October 2024, APY had recorded over 7 crore gross enrolments, including more than 56 lakh new subscribers during financial year 2024-25 . The Pension Fund Regulatory and Development Authority (PFRDA) has played a key role in promoting the scheme through various initiatives, including outreach programmes at the state and district levels, awareness and training programmes and publishing APY flyers in Hindi, English, and 21 regional languages.
The scheme currently allows subscribers to contribute modest amounts, starting as low as Rs 42 per month for an 18-year-old opting for a Rs 1,000 monthly pension. The maximum contribution is Rs 1,454 per month for a 40-year-old desiring Rs 5,000 as monthly payouts.
Subscribers' spouses are also covered under the scheme, ensuring the same pension for life in the event of the subscriber’s demise. On the death of both the subscriber and the spouse, the contributed amount, along with interest, is returned to the nominee.
Finance Minister Nirmala Sitharaman, speaking earlier in 2024, highlighted the scheme’s best-practice choice architecture, which ensures continuity of premium payment unless the subscriber opts out. The scheme guarantees a minimum 8 percent return, she had added.
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