In a significant policy move, the Centre is working on a ‘universal pension scheme’ that will be available to all citizens, including workers in the unorganised sector, salaried employees, and self-employed individuals, the NDTV quoted Labour Ministry sources on Wednesday.
At present, those in the unorganised sector — such as construction workers, domestic staff, and gig workers — lack access to government-run large savings schemes. The new initiative aims to bridge this gap by providing a secure and voluntary pension framework for all citizens, irrespective of their employment status.
Unlike the Employee Provident Fund Organisation (EPFO) and other government-backed pension schemes, the proposed scheme will operate solely on voluntary contributions from individuals, with no direct financial input from the government.
Key Features of the New Pension Scheme
- Open to all citizens, including unorganised sector workers, salaried employees, and self-employed individuals.
- Participation will be voluntary, allowing individuals to contribute based on their financial capacity.
- The government will not make contributions to individual pension funds under this scheme.
- It aims to streamline existing pension frameworks, possibly integrating some current schemes.
- It will not replace the National Pension Scheme (NPS) but will provide an additional option for long-term savings and retirement security.
- Stakeholder consultations will commence once the proposal document is finalised.
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Comparison With Existing Pension Schemes
Currently, several government-run pension programs cater to different sectors, such as:
Atal Pension Yojana (APY): Provides a guaranteed monthly return of Rs 1,000 – Rs 5,000 after the investor turns 60.
Pradhan Mantri Shram Yogi Mandhan Yojana (PM-SYM): Designed for street vendors, domestic workers, and labourers, offering a pension of Rs 3,000 per month after 60.
Pradhan Mantri Kisan Mandhan Yojana: A pension scheme for farmers with a Rs 3,000 monthly payout post-retirement.
What Lies Ahead?
The proposed ‘New Pension Scheme’ is expected to consolidate and simplify pension options, ensuring a more inclusive savings structure for all Indians. Once the proposal document is complete, the government will initiate discussions with stakeholders, paving the way for its official rollout.
As India continues to expand its financial inclusion efforts, this universal pension scheme could mark a major step toward ensuring economic security for all citizens in their post-retirement years.
