Few takers for pension plan

Less than 2 lakh people have subscribed to the scheme, which offers only Rs 5,000 a month.

The newly launched Atal Pension Yojana (APY) has not found many takers, unlike the Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY). All three were launched on 9 May. While PMSBY and PMJJBY have received responses from around 10.17 crore people, fewer than 2 lakh people have subscribed to APY.

“It is true that the APY has not been received too enthusiastically. Till now around 1.85 lakh people have applied for this scheme. Whereas our estimate was that by 31 May around 50 lakh people would get enrolled under this scheme. In comparison, over 10 crore have enrolled into the two other schemes”, an official familiar with the development said.

According to officials, the “low” pension amount — Rs 5,000 per month — being promised by the scheme could be making people stay away from the scheme.

In contrast, PMSBY will offer a renewable one-year accidental death-cum-disability cover of Rs 2 lakh for partial/permanent disability to all savings bank account holders in the age group of 18-70 years for a premium of Rs 12 per annum per subscriber.

PMJJBY, on the other hand, offers a renewable one-year life cover of Rs 2 lakh to all savings bank account hold- ers in the age group of 18-50 years, covering death due to any reason, for a premium of Rs 330 per annum per subscriber.

“We have now asked the public sector banks to enrol people under the APY scheme and they have been asked to ‘target’ those who have savings bank accounts. We are expecting that by the end of this year, at least 2 crore people will have taken the membership of this scheme,” the official quoted above stated.

According to a senior State Bank of India officer, who deals with government social schemes, apart from the low pension that has been promised under the scheme, the fact that the lock-in period is a long one could be the reason behind the poor response. “If a 30-year-old man opens an account under this scheme, he will have to keep paying the premium for 30 years to avail the pension. Similarly, the maximum amount of pension that has been promised un- der this scheme, Rs 5,000, will have negligible value 30 years from now. How many people will react enthusiastically if they are told that they will get Rs 5,000 in 2050 as their pension? The value of Rs 5,000 in 2050 will not be more than Rs 500,” he said.

APY has been formulated while keeping the unorganised sector in mind. In this scheme, the Central government will give 50% of the total contribution, or Rs 1,000 per annum.