APY, NPS increase Pension Coverage in India says Economic Survey 2024: The number of pension scheme subscribers in the country has increased rapidly and schemes introduced by the government like Atal Pension Yojana (APY) and National Pension System (NPS) have contributed significantly to this growth. This information has been given in the Economic Survey 2023-24 presented in the Lok Sabha on Monday. According to the survey, now about 5.3 percent of the country’s population has got coverage of these pension schemes, whereas in the financial year 2016-17 this ratio was only 1.2 percent.
Pension sector has grown rapidly in 7 years: Survey
According to the Economic Survey 2023-24, by March 2024, the total number of subscribers of the National Pension System (NPS) and Atal Pension Yojana (APY) increased to 7 crore 35 lakh 60 thousand. Whereas at the end of March 2023, this number was around 6 crore 23 lakh 60 thousand. In this way, the number of subscribers of these schemes has grown at the rate of 18% annually. According to the report, due to this success of APY and NPS, the coverage of both pension schemes in the country has reached 5.3% of the total population, which was only 1.2% in the financial year 2016-17.
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The biggest contribution of APY
According to the Economic Survey, the biggest contribution in increasing pension coverage is of Atal Pension Yojana (APY) which was brought keeping in mind the weaker income groups. This scheme has the highest share of about 80% of the subscribers of pension schemes in the country. In March 2023, the total number of subscribers of APY, including the old name NPS Lite, was 5.01 crore, which increased to 5.88 crore by March 2024. The coverage of this scheme has also been very good in terms of gender equality. In the financial year 2016-17, the ratio of female subscribers in this scheme was 37.2%, which increased to 48.5% in the financial year 2022-23. Apart from this, the trend of youth joining this scheme is also clearly visible. Between FY 2016-17 and FY 2022-23, the share of youth aged 18 to 25 years in this scheme has increased from 35% to 46.7%.
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Challenges related to pension coverage
Along with this, the Economic Survey also points out the major challenges related to pension coverage in the country. For example, despite rapid growth, about 92% of the subscribers of Atal Pension Yojana (APY) have paid premium only for the minimum pension of Rs 1,000 per month, which shows that for low-income families, the needs related to daily consumption still outweigh long-term goals like pension necessary for a secure future. At the same time, the proportion of people subscribing for a pension of Rs 5,000 per month is only 4.7 percent.
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AUM of APY and NPS increased four times
The total assets under management (AuM) of APY and NPS have also increased significantly. In the financial year 2016-17, the AUM of these two schemes was equal to 1.1% of the country’s GDP, which has increased almost 4 times to 4% of GDP in the financial year 2023-24. This growth reflects the increasing importance of the pension sector in India’s economy.
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What is the future of these plans?
The Economic Survey says that the coverage of NPS is expected to increase rapidly in the coming days. NPS coverage is expected to increase especially in the private sector. According to the survey, as the per capita income in India increases and the number of upper-middle income people increases, corporate employees and self-employed people will join NPS in large numbers.