Atal Pension Yojana was launched in 2015 under the Pension Fund Regulatory Authority of India (PFRDA). This scheme is mainly designed to facilitate the unorganized sector workers of the country such as people working in the private sector, workers in contract or small industries or workers engaged in agriculture who have no pension scheme, to get a minimum pension of ₹1000/- to ₹5000/- after the age of 60 years. It is designed for that purpose.
Atal Pension Scheme Details
Now let’s take a look at the details of this scheme which are:
- The age limit for investing in this scheme is 18 to 40 years.
- The depositor has to invest for a minimum of 20 years.
- In this case the monthly premium amount is from ₹210/- to ₹1454/-.
- The monthly premium amounts range from ₹42/- to ₹291/- in case of minimum pension.
- After the age of 60, the depositor will get a fixed pension ranging from a minimum of ₹1,000/- to a maximum of ₹5,000/- per month.
Recent Survey on Atal Pension Yojana
A recent survey by the Indian Council of Social Science Research (ICSSR) on Atal Pension Yojana revealed that one-third of depositors have opted out of the scheme, alleging that their pension scheme accounts were opened without their express permission.
Atal Pension Scheme Controversy
Congress General Secretary Jayaram Ramesh questioned the Atal Pension Yojana, writing on his ‘X’ handle that “Finance Minister was in Bengaluru on March 24, where he announced the benefits of Atal Pension Yojana as the Modi government’s ‘flagship social security programme’.” Just a day after that it was known that-
- A third of the scheme’s subscribers were enrolled in the scheme without ‘express permission’, meaning officers wanted to meet their quota.
- About 83% of the depositors of this scheme belong to minimum ₹1,000/- monthly pension, which is much less than required, but in that case it remains ‘unnoticed’ by the beneficiaries as the monthly premium is also low.
- Also, the amount of return in this scheme is not very attractive for the customers as it is a fixed income pension and it is also not adjusted to the rising market value.
Quoting a media report, he said that one in three people excluded from the Atal Pension Yojana had their accounts opened without their express permission and said that the ‘Flagship Atal Pension Yojana is a very poorly designed scheme. It is a paper tiger to deceive officials and compel common people to participate in it’.
He further said that ‘It is a fair representation of the Modi government’s policy of title management, that few benefits actually reach the people!’
The Finance Minister was in Bengaluru on the 24th of March, where she was proclaiming the benefits of the Atal Pension Yojana initiated by the Modi Government as its “flagship social security program.” Just a day later, here’s what emerged:
— Jairam Ramesh (@Jairam_Ramesh) March 26, 2024
• Up to a third of the subscribers to… pic.twitter.com/wRewnCA1Nh
This led to a spat between Finance Minister Nirmala Sitharaman and the Congress leader on social media platforms. While Congress leaders have questioned the shortcomings of the pension scheme, the finance minister is analyzing the benefits of the scheme.
Responding to the Congress leader’s allegation, Finance Minister Nirmala Sitharaman said that the project is based on the best architecture. This scheme is a subsidized scheme for poor and lower middle class Under this scheme the depositors can choose the premium of their choice and have it run automatically. Also they can decide to continue it or stop it at will. He also said that this pension scheme offers guaranteed returns of at least 8 percent.
He referred to the book ‘Nuz’ by 2017 Nobel laureate in economics Richard Thaler and Cass Sunstein, who is a professor and worked in the Obama administration, and said the need for a proper ‘choice architecture’ in designing public schemes was explained.
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.
— Nirmala Sitharaman (Modi Ka Parivar) (@nsitharaman) March 26, 2024
Atal Pension Yojana is designed based on best practice choice architecture to automatically continue… https://t.co/5y6Gn3MBYx
Responding to Congress leader Jairam Ramesh’s ‘fixed income pension’ statement, he said that they have said this without verifying the truth. Government of India guarantees a minimum return of 8% which is an attractive guaranteed minimum return irrespective of prevailing interest rates and returns under Atal Pension Yojana. In this case, Government of India provides subsidy to PFRDA to meet the shortfall in actual returns.
He also said that if higher investment returns are obtained on the contribution of the scheme’s subscribers, then the subscribers will be paid a higher pension and in fact, currently the returns are more than 8%.
