Atal Pension Yojana: FM Sitharaman praises scheme, rebuts Opposition leader’s ‘poor design’ barbs

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New Delhi: Finance minister Nirmala Sitharaman took to social media platform X to state that the Atal Pension Yojana was based on “best practice choice architecture” rebutting Congress leader Jairam Ramesh’s comments on the scheme in which he raised concerns around explicit consent, low pension slabs and unattractive returns.

Atal Pension Yojana is a scheme that requires people to opt out instead of making an annual decision whether to continue with it, said Sitharaman. She cited the book titled Nudge by Richard Thaler and Cass Sunstein which propounds the advantage of “choice architecture in designing public schemes.”

Atal Pension Yojana returns

Finance minister Nirmala Sitharaman said the scheme offers 8 per cent returns irrespective of prevailing interest rates, refuting Ramesh’s contention that APY was a fixed income scheme. Ramesh said 83 per cent APY subscribers were in the lowest slab of Rs 1,000 pension owing to a low monthly contribution.

APY targeted at poor and lower middle class

Finance minister Sitharaman said the scheme was targeted at poor and lower-income households indicating that it is meant to provide social security based on small-ticket savings. ” If the offtake was at the higher end, that would be surprising!,” she said.

Sitharaman also traded barbs with Ramesh over the alleged coercion of consumers into opting for the scheme, adding that a former SBI chairman was forced to resign owing to his stance against providing loans to “favourites of the dynasty.” Schemes such as APY seek to make the poor self-sufficient and non-reliant on government handouts, she said.

What is Atal Pension Yojana?

Atal Pension Yojana (APY) is a guaranteed pension scheme designed for unorganised sector workers. Based on the contribution, the APY provides Rs 1,000-5,000 pension to subscribers.

Here’s the contribution chart for APY:

Contributors who are not beneficiaries of statutory social schemes will receive up to 50 per cent contribution or Rs 1,000 per annum, whichever is lower in their APY account.
Government co-contribution is only allowed up to a period of 5 years.
APY can be subscribed by any citozen aged 18-40 years
The pension will be credited after the subscriber tunrs 60
The scheme contribution is auto-debited form the subscriber’s account
Exiting APY before the age of 60 is only allowed under exceptional circumstances
Contribution status may be checked at: https://npslite-nsdl.com/CRAlite/EPranAPYOnloadAction.do
It is mandatory to have a savings account in order to open an APY account

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