The Union Cabinet on Wednesday gave its approval to a Budget proposal to double investment limit in Pradhanmantri Vaya Vandana Yojana (PMVVY) scheme to Rs 15 lakh per senior citizen and extend the time limit for its subscription by two years to March 2020.

The move is expected to help senior citizens earn a pension of up to Rs 10,000 a month. As of March, 2.23 lakh senior citizens are being benefited under PMVVY, sources said after the Cabinet meeting chaired by Prime Minister Narendra Modi.

Finance Minister Arun Jaitley had proposed the amendment in the scheme in this year's Union Budget in February.

Assured return

The PMVVY is being implemented through Life Insurance Corporation of India (LIC) to provide social security in old age and protect elderly persons aged 60 years and above from a future fall in their interest income due to uncertain market conditions.

The scheme provides an assured pension based on a guaranteed rate of return of 8% per annum for 10 years, with an option for pension on a monthly/quarterly/half yearly and annual basis.

The difference between the return generated by LIC and the assured return of 8% per annum would be borne by the Centre as a subsidy on an annual basis.