Economic Survey 2023: NPS assets now 3.2% of India’s GDP

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Even as the debate around old versus new pension schemes for government employees rages on, the private sector seems to be embracing the National Pension System (NPS) at a fast clip.

Both the voluntary subscription schemes – Atal Pension Yojana (APY) and NPS all-citizens-model – are driving the pension coverage in the country.

The number of pension subscribers has multiplied over three-fold, led by APY, with the assets under management (AUM) growing over four-fold, led by NPS, between financial year 2017-18 and 2021—22, the Economic Survey 2022-23 noted, citing Pension Fund Regulatory and Development Authority of India (PFRDA) data.

The coverage of the population in pension under NPS and APY as a share of the total population has risen from 1.2 percent to 3.7 percent between financial years 2017-18 and 2021-22. “Assets as a proportion of GDP have increased from 1.2 percent to 3.2 percent, reflecting that the pension sector is progressing much faster than the nominal growth of the economy and population,” the survey stated.

APY, a defined pension scheme, was introduced in 2015 for providing financial security beyond working years to unorganised sector workers. NPS’s all-citizen-model allows individuals to contribute voluntarily towards building a retirement corpus and creating a pension income stream during their retirement years.

The private sector holds the key to growth in future as well. “The future expansion in NPS is expected to emanate from the private sector, both the salaried and self-employed. Steps towards enhanced pension literacy, both of the subscribers and the intermediaries, coupled with a nudge from the regulator and the government, along with encouragement to young adults to join a pension scheme, would accelerate the movement towards a pensioned society,” the Economic Survey stated.