To enhance social security cover for unorganised sector workers and low-income persons, a composite scheme providing both pension and insurance benefits has been suggested to the government, the chairman of the Pension Fund and Regulatory Authority of India (PFRDA) said.
The authority has suggested to the Finance Ministry that a comprehensive social security scheme can be explored for people having low income, PFRDA Chairman Supratim Bandyopadhyay said.
"We have given some suggestions to the government. We are thinking whether we can have a comprehensive pension scheme taking along APY (Atal Pension Yojana), Pradhan Mantri Jeevan Jyoti Bima and Suraksha Bima. We are thinking of taking all these products together whether we can have a combined kind of scheme," Bandyopadhyay said.
The scheme, he said, can be managed in a way so that the APY part comes to the PFRDA and the insurance part goes to the insurer.
"All these things can come together. APY will give the pension benefit, the old age security, along with that people need insurance benefits also," he said.
Bandyopadhyay said the insurance premium under the government's schemes targeted for the poor and less privileged are very competitive.
In Jeevan Jyoti Bima, the government is charging only Rs 330 yearly while the Suraksha Bima for accidental death cover charges only Rs 12 a year or only a rupee a month, he added.
"APY also is quite low (charge wise). So if all these things can be clubbed together, a person will be covered from all the sides.
"So we have been discussing with the ministry. So let us see if something comes out of that," said the PFRDA Chairman.
On asked about the current lockdown challenges due to the coronavirus pandemic and its impact on APY which mainly caters to those in the unorganized sector and have a low level of income, he said the authority has banks not to deduct subscribers' dues during April-June.
A subscriber needs to have a bank account to subscribe to the APY and deductions can happen on a monthly, quarterly or half-yearly basis. Over 70 per cent or 3/4 APY subscribers contribute towards this guaranteed pension scheme monthly, the chairman said.
"We had expected that there will be some kind of delay/defaults by the subscribers. So we have requested the banks not to deduct from subscribers' account for the first quarter i.e. April-May-June period because these people need this money for other more important things. The priority now has to be different and we have recognised this also," Bandyopadhyay added.
However, from the second quarter onwards the contributions can be resumed and there will be no levy of any fine or penalty, he said further.
APY which completed five years this month has garnered over 2.23 crore subscribers since the launch and added over 69 lakh subscribers during the last fiscal ended March 2020.
The PFRDA Chairman said the scheme has seen very impressive growth over the last five years and the last year was also very good with banks such as SBI and Airtel Payments Bank bringing in 17 lakh and one lakh new subscribers, respectively, during 2019-20.
Likewise, the private sector banks are also doing quite well except for a few cases of hiccups on part of regional rural banks.
On asked about the challenges due to the coronavirus pandemic, he said times are tough and there may be very tepid growth in adding new subscribers during the first quarter.
The PFRDA added merely 50,000 new subscribers in the current fiscal so far which is below normal, the chairman said.
Had it been a normal time, the PFRDA could have added nearly 2.5 lakh subscribers during this same period, Bandyopadhyay said.
He expects things to improve from July onwards or at the maximum by September-end.