Nirmala Vs Jairam: FM tears into Jairam on Atal Pension Yojana

In a detailed post on the social media platform, X (formally Twitter), Sitharaman said that the platform was designed on choice architecture to enable subscribers to ‘opt out’

In a dramatic face-off that transpired on social media platform ‘X’, Union Finance Minister Nirmala Sitharaman slammed Congress leader and former environment minister Jairam Ramesh’s claim that the Modi government’s flagship scheme, Atal Pension Yojana, was poorly designed and was giving “not very attractive” returns.

In a detailed post on the social media platform, X (formally Twitter), Sitharaman said that the platform was designed on choice architecture to enable subscribers to ‘opt out’. “This is a deliberate and beneficial feature which is in the best interest of the subscribers. Instead of requiring people to decide each year to continue, they have to take a decision to discontinue,” she posted.

On Atal Pension Yojana, @Jairam_Ramesh known for using verbal sophistry to hide facts, is being malicious or is ignorant of the basic tenets of designing a good pension scheme. Atal Pension Yojana is designed based on best practice choice architecture to automatically continue… https://t.co/5y6Gn3MBYx

— Nirmala Sitharaman (Modi Ka Parivar) (@nsitharaman) March 26, 2024

On the argument that the scheme does not give very attractive returns after indexing with inflation, Sitharaman explained that the minimum return guaranteed by GoI is at least 8 percent regardless of prevailing interest rates and returns. “This is an attractive guaranteed minimum return”. GOI pays a subsidy to PFRDA to make up for any shortfall in actual returns. She went on to add –“In fact, currently the returns are more than 8%.”

On Ramesh’s argument that: “Nearly 83% of the subscribers are in the lowest slab of Rs 1,000 pensions because the monthly contribution for it is low and it goes “unnoticed” by the beneficiaries,” Sitharaman retorted “ As regards the majority of pension accounts being in the lower slabs, for a subsidised scheme intended for the poor and lower middle class, this is obvious. In fact, it shows the proper targeting of the scheme. If the scheme was at the higher end, that would be surprising.”