Cabinet gives approval to pension, insurance schemes

New Delhi : The union cabinet on Wednesday gave its approval to operationalising three social sector schemes – Atal Pension Yojna (APY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Pradhan Mantri Suraksha Bima Yojana (PMSBY).

The decisions, aimed at “creating a universal social security system for all Indians”, were taken at meeting of the cabinet presided over by Prime Minister Narendra Modi.

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“Approval of the cabinet was given to extend funding support for implementing the APY and apprise the cabinet on operationalisation of the PMJJBY and the PMSBY. Approval was also given to provide Rs.50 crore per annum for the next 5 years as the government contribution for publicity related expenditure for PMJJBY and PMSBY,” an official release said.

Under the APY, subscribers would receive a fixed minimum pension of Rs.1,000-5,000 per month at the age of 60 years, depending on their contributions, which itself would vary on their age of joining.

The central government would also co-contribute 50 percent of the total contribution or Rs.1,000 per annum, whichever is lower, to each eligible subscriber account, for a period of five years – from 2015-16 to 2019-20 – to those who join the national pension scheme before December 31, 2015 and who are not members of any statutory social security scheme and are not income tax payers.

The pension would also be available to the spouse on the death of the subscriber and thereafter, the pension corpus would be returned to the nominee.

The minimum age of joining APY is 18 years and maximum age is 40 years.

The benefit of fixed minimum pension would be guaranteed by the government.

Under PMJJBY, annual life insurance of Rs.2 lakh would be available on the payment of a premium of Rs.330 per annum by the subscribers.

The PMJJBY will be made available to people in the age group of 18 to 50 years having a bank account from where the premium would be collected through the facility of “auto-debit”.

Under PMSBY, risk coverage will be Rs.2 lakh for accidental death and full disability and Rs.1 lakh for partial disability.

The scheme will be available to people in the age group 18 to 70 years with a bank account, from where the premium would be collected through the facility of “auto-debit”.

The release said government expenditure was expected to range between Rs.2,520 crore and Rs.10,000 crore on account of its co-contribution to subscribers of APY over a period of five years.

An expenditure of Rs.2,000 crore for promotional activities for enrolment and contribution collection under APY and Rs.250 crore for publicity and awareness building for PMJJBY and PMSBY was envisaged by the government over five years.

It is expected that around two crore subscribers would be enrolled during the current financial year under APY.

The release said a large proportion of India’s population was without insurance of any kind.

“Therefore, the government has decided to work towards creating a universal social security system for all Indians, specially the poor and the under-privileged, to address longevity risks among workers in the unorganised sector and to encourage workers in the unorganised sector to voluntarily save for their retirement,” it said.

It said unorganised sector workers constitute 88 percent of the total labour force of 47.29 crore, according to the 66th Round of National Sample Survey Office (NSSO) Survey of 2011-12.