ATAL PENSION YOJANA (APY)
The number of subscribers under the National Pension Scheme (NPS) and Atal Pension Yojana (APY) increased 23 per cent to over 6.24 crore the Finance Ministry said recently. Of this, there was over 28 per cent growth in APY subscribers and more than 1 crore new customers were added.
2. About Atal Pension Yojana
Atal Pension Yojana (APY) is a pension scheme introduced by the Government of India in 2015. It aims to provide social security to citizens, particularly those in the underprivileged and unemployed sectors. The scheme guarantees a fixed monthly pension after the age of 60.
Major Features of Atal Pension Yojana
- The scheme offers a monthly pension ranging from Rs. 1,000 to Rs. 5,000, depending on the contribution made.
- The government contributes 50% of the subscriber's contribution or Rs. 1,000 per year, whichever is lower, for up to 5 years. This contribution is for subscribers not covered by other pension schemes and not paying income tax.
- APY aims to provide security against various challenges like illness, accidents, and diseases, primarily targeting the unorganized sector. Spouses receive the pension after the subscriber's demise, and nominees receive a lump sum payment if both pass away.
Eligibility for APY
- The scheme is open to all Indian citizens aged between 18 and 40.
- Contribution levels vary depending on the age of enrollment.
- Aadhaar authentication is mandatory for enrollment and contribution deductions.
Benefits of APY
- Subscribers receive a fixed pension upon reaching 60 years.
- Spouses and nominees receive benefits in case of the subscriber's demise.
- Contributions to APY are tax-deductible, similar to contributions to the National Pension System (NPS).
Enrollment and Subscriber Payment
- APY offers an auto-debit facility for easy contributions.
- Penalty charges apply for delayed payments, ranging from Re. 1 to Rs. 10, depending on the contribution amount.
- Accounts face freezing, deactivation, and closure if payments are not made for specified periods.
Funding of APY
- The Central Government co-contributes 50% of the subscriber's contribution, up to Rs. 1,000 per year, for 5 years.
- To be eligible, individuals must join before March 31, 2016, not be beneficiaries of other social security schemes, and not be income taxpayers.
- The government provides subsidies for promotional activities to encourage APY enrollment.
3. Difference between National Pension Scheme and Atal Pension Yojana
| Features | National Pension Scheme (NPS) | Atal Pension Yojana (APY) |
| Age | Minimum: 18 years; Maximum: 65 years | Minimum: 18 years; Maximum: 40 years |
| Eligibility Criteria | All Indian citizens, residents or non-residents | Indian citizens with a bank/post office account |
| Type of Account | Single account | Tier I (mandatory) and Tier II (optional) |
| Nominee | Nomination required; spouse not allowed | Nomination required; spouse can be nominee |
| Account Number | Permanent Retirement Account Number (PRAN) | No specific account number provided |
| Pension Slab | Pension amount not predefined | Monthly pension slab: Rs. 1,000 - Rs. 5,000 |
4. The Way Forward
Atal Pension Yojana serves as a vital social security measure, ensuring financial stability for citizens in their old age, particularly those in the unorganized sector. Its structured approach to pension provision and government support makes it a significant initiative towards securing the future of millions of Indians.
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For Prelims: Atal Pension Yojana, National Pension Scheme For Mains: 1. Analyze the features and objectives of the Atal Pension Yojana (APY) introduced by the Government of India, emphasizing its role in providing financial security to underprivileged and unemployed citizens. (250 Words) 2. How has the Contributory Pension Scheme (CPS) affected the investment landscape in India, particularly for pension funds? (250 Words) |
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Previous Year Questions 1. Regarding 'Atal Pension Yojana', which of the following statements is/are correct? (UPSC 2016) 1. It is a minimum guaranteed pension scheme mainly targeted at unorganized sector workers.
2. Only one member of a family can join the scheme.
3. The same amount of pension is guaranteed for the spouse for life after the subscriber's death.
Select the correct answer using the code given below.
A. 1 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
2. Who among the following can join the National Pension System (NPS)? (UPSC 2017) A. Resident Indian citizens only
B. Persons of age from 21 to 55 only
C. All State Government employees joining the services after the date of notification by the respective State Governments
D. All Central Government employees including those of Armed Forces joining the services on or after 1st April, 2004
Answers: 1-C, 2-C |
Source: The Indian Express
