Govt modifies APY to attract more subscribers

After Atal Pension Yojana (APY) evoked a little response from subscribers, the government on Thursday modified the scheme by removing the lock-in period from APY, and also the penalty on late payment of subscription.

Launched on May 9, the APY has only 4.69 lakh subscribers till July-end, while two other insurance schemes — Pradhan Mantri Suraksha Bima Yojana (PMSBY), attracted 7.84 crore people and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), a life insurance product  2.70 crore subscribers.

“Certain suggestions have been received, including from the state governments, regarding providing certain relaxations for informal sector workers, having intermittent incomes, from the provision of mandatory monthly contributions under the scheme of APY, and also removing the penal provisions for non-contribution under APY to make the scheme more viable,” the Finance Ministry said.

Necessary revisions were made in APY to increase the acceptability of the scheme among informal sector workers, it said.

The modified provisions carried out in the scheme are that individual subscribers shall have an option to make the contribution on a monthly, quarterly, half-yearly basis instead of on a monthly basis earlier; discontinuation of the payment of contribution provision has been substantially modified in favour of the subscriber. The account will not be deactivated and closed till the account balance with self-contributions becomes zero, due to deduction of account maintenance charges and fees.

Also, the penalty on delayed payments has been simplified to Re 1 per month for contribution of Rs 100 or part thereof, for each delayed monthly payment. The scheme provides a minimum guaranteed pension of Rs 1,000-Rs 5,000 per month for people in the age group of 18-40 years.