In India, the coverage gap is about 90% of the total estimated workforce. Coverage gap refers to workers who do not have access to any formal scheme for old-age income. Addressing Social Security in India with particular reference to retirement income for workers within the coverage gap is the need of the hour. This article gives a detailed description about Pension Schemes & Social Security in India. You can also download Social Security in India and Pension Schemes in PDF format for later revision.
The Government of India established Pension Fund Regulatory and Development Authority (PFRDA) on 10th October, 2003. Its purpose is to develop and regulate pension sector in the country. The National Pension System (NPS), launched on 1st January 2004, provides retirement income to all citizens. It hopes to encourage citizens to develop the habit of saving for retirement.
Initially, NPS was introduced for the new government recruits (except armed forces). Since 1st May 2009, NPS has been provided for all citizens of the country including the unorganised sector workers. Citizens can now seek to enroll in the NPS on a voluntary basis. The Central government also introduced the “Swavalamban Scheme” to encourage people from the unorganised sector to voluntarily save for their retirement.
NPS allots the subscriber a unique Permanent Retirement Account Number (PRAN). This unique account number will remain the same for the rest of subscriber’s life. This unique PRAN can be used from any location in India. PRAN will provide access to two personal accounts:
The Public Provident Fund is a savings-cum-tax-saving instrument in India. The National Savings Institute of the Ministry of Finance introduced PPF in 1968.The aim of the scheme is to mobilize small savings by offering an investment with reasonable returns combined with income tax benefits.
The government of India decides the rate of interest for PPF account. The current interest rate effective from 1st April 2016 is 8.1% Per Annum (compounded annually). Broadly speaking, if you deposit an amount of 1 lakh every year for 15 years without any exception, then you will receive a total sum of more than 30 lakh. This reflects the huge amount of benefit applicable on PPF account, for a total investment of 15 lakh (1 lakh every year * 15 years) interest received is more than 16 lakh, which is also in fact non-taxable.
Hola! If you haven't heard this quote yet, take a moment to read it here.…
"Think good an good follows. Think evil and evil follows. Think creative and creativity will…
Better late than never! Apologies for the delay in responding, but I'm here now to…
By providing accurate information, context, promoting critical thinking, raising awareness, connecting global and local issues,…
Current affairs coverage often showcases stories of individuals and communities making a positive impact. Q1.…
Current affairs coverage helps individuals understand the interconnectedness of global and local events. It shows…