A large segment of Indian society continues to lack access to pensions which is a cause of concern for the Pension Fund Regulatory and Development Authority (PFRDA) and the government, said PFRDA Chairman Hemant Contractor at a recent conference on the Atal Pension Yojana (APY).
APY is a government-backed pension scheme targeted at the unorganised sector. The Ministry of Finance revealed that the APY currently has over 6.9 million subscribers, with total contribution of INR26.9bn (US$414mn).
"APY has made progress in covering the intended subscribers, but much remains to be done. On an average, a little less than 2 percent of the eligible population is covered under APY and hence a lot has to be done to provide people regular access to old age income," said Mr Contractor.
He also touched on the issue of persistence in APY accounts and asserted that the objective of the scheme is to provide a pension and this will only happen if the contributions to the accounts are regularly paid.
About 110 million or 9 percent of India's population is over 60 years, with this figure expected to go over 180 million by 2030. The 60 plus age groups is the fastest growing demographic in the country.
APY, introduced in 2015 by the government, is a self-contributory savings pension scheme.