To bridge the disparity between higher life-expectancy and lack of income support in the old age, the government is considering launching a mission to provide credible retirement benefit cover to nearly 38 crore hitherto uncovered workforce in the country.
Currently, around 12 crore workers, the bulk of whom in the organised sector, enjoy some kind of retirement benefit under either of the following schemes: Employment Provident Fund (EPF), National Pension System (NPS), PM Shrarm Yogi Maandhan, Pradhan Mantri Kisan Maan-Dhan Yojana, Coal Mines Providend Fund, Assam Tea Plantation Provident Fund, Seamen Provident Fund, and various other superannuation funds.
“Inter-ministerial consultations are taking place on how to arrive at pension/retirement benefit cover saturation. The idea is everyone should be in one of the schemes,” an official told FE. The budgetary impact of the mission, which may include giving incentives to the workers and employers, and administrative set-ups, would need be assessed, keeping in view the funds availability. The savings boost to result from a much larger pension cover for workers in the country could also spur investments, the officials, who initiated the discussions, feel.
India has an estimated workforce of about 50 crore, aged 16 to 60 years.
“Providing fiscal incentives without people being aware of the incentives won’t help. There is a need to start a serious campaign to wake up these 38 crore people that they need to save for retirement,” said Gautam Bhardwaj, co-founder of pinBox, a global pensionTech committed to digital micro-pension inclusion in Asia and Africa.
“If the government does so, then you might end up in a situation where you have $500 billion of additional long-term savings over the next 10 years in India. These new savings will also benefit the economy and markets, besides boosting infrastructure investments and overall economic development.”