IJSART - Volume 3 Issue 10 –OCTOBER 2017 ISSN [ONLINE]: 2395-1052

Atal Pension Yojana: A Wealth Management Roadway

to Empower the Unorganized Section Of India
Asst. Prof. Roshan Raju1, Asst. Prof. Supriya Bhagat2
1,2 Sadhu Vaswani Institute of Management Studies (SVIMS) for Girls, Pune.

Abstract- In the NDA government’s agenda financial inclusion • To study the Operational Framework of Atal Pension
and a universal social security system have been high. PM Yojana
Narendra Modi, FM Arun Jaitley and the Cabinet have worked • To critically review how Atal Pension Yojana is
towards promulgation of new schemes that give financial helping the unorganized section of the Indian society.
security to the common man. The government initially launched
the Pradhan Mantri Jan Dhan Yojana (PMJDY), which was a III. FEATURES OF ATAL PENSION YOJANA
major success. In May, 2015 3 more schemes were launched
viz. Pradhan Mantri Jeevan Jyoti Bima Yojana,Pradhan Mantri To encourage individuals who are from the weaker
Suraksha Bima Yojana and Atal Pension Yojana. The research section to opt for pension, this would immensely benefit them
paper focuses on “Atal Pension Yojana” which came into during their old age. The Atal Pension Yojana scheme can also
action in June 2015, to help the unorganized section of the be taken by individuals or by anyone who is self-employed or
Indian society such as personal maids, drivers, gardeners etc. working in private sector organizations.
It is administered by the Pension Fund Regulatory and
Development Authority. Under the APY, depending on individual
contributions, the subscribers would receive the fixed pension
Keywords: Atal Pension Yojana,Wealth Management, Pension. of Rs. 1000 per month, Rs. 2000 per month, Rs. 3000 per
month, Rs. 4000 per month, Rs. 5000 per month, at the age of
I. INTRODUCTION 60 years.

The Indian government is trying hard to create a The benefit of fixed pension would be guaranteed by
universal social security system for all its citizens. The major the Government. For a period of 5 years, i.e., from 2015-16 to
issues likes’ illness in the old age, accidents always hamper the 2019-20 the Central Government would also co-contribute 50%
life of individuals. In line with with this idea, a National of the subscriber’s contribution or Rs. 1000 per annum,
Pension Scheme, the Atal Pension Yojana was introduced from whichever is lower, to each eligible subscriber account, , who
May, 2015. The Government of India is very concerned about join the NPS before 31st December, 2015 and who are not
the old age income safety of the employed deprived basic income tax payers
amenities and is focused on boosting and enabling them to join
the National Pension System. The spouse will be entitled to get the exact same
pension amount as the subscriber, until the death of the spouse
To address the longevity risks among the workers in or after the death of the account holder. After the demise of the
unorganized sector and to encourage the workers in subscriber and his spouse the nominee will get the entire
unorganized sector to voluntarily save for their retirement the pension amount accrued by the account holder. This amount
Government had started the Swavalamban Scheme in 2010-11. varies yet again with the contribution the subscriber has made
The sector constitutes 88% of the total labor force do not have previously.
any formal pension provision. However, due to lack of clarity
of pension benefits at the age after 60 coverage under III. GOVERNMENT OF INDIA’S CO-
Swavalamban Scheme becomes inadequate. This led to the CONTRIBUTION SCHEME
launch of Atal Pension Yojana which caters to this sector. The
existing subscribers of Swavalamban Scheme will be With the aim of getting more account to open under
automatically migrated to APY, unless they wish to opt out. this scheme encouragement has been done by the government
of India from a time period of five years, i.e., from 2015 to 2020
II. OBJECTIVES by funding a sum towards the pension scheme. Subscriber
accounts have been opened between June 1, 2015 to December

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IJSART - Volume 3 Issue 10 –OCTOBER 2017 ISSN [ONLINE]: 2395-1052

31, 2015 so that more number of citizens shall open Atal

Pension Yojana account.

To avail the benefits under this scheme the customers

should not be income tax payers and should not have been
covered under any Statutory Social Security Schemes. The
Government of India’s contribution is either 50% of the
subscriber’s monthly contribution amount or Rs. 1000,
whichever is lower, for the tenure of five years.

In order to get maximum benefit under this scheme

and to receive the Government’s contribution, the Atal Pension
Yojana subscriber has to make regular monthly contributions
during the entire course of the year. Only then will the
Government of India credit 50% of the monthly contribution
paid, to the subscriber’s account.

IV. ELIGIBILITY OF ATAL PENSION

YOJANA

The following eligibility criteria need to be met by

every applicant. Who is having citizenship of India in order to
join the Atal Pension Yojana Scheme?

• Valid savings accounts to open an Atal Pension Yojana

account.

• The applicant should be between 18 - 40 years of age.

• Valid mobile number, which has to be registered at the

time of application. Source : http://economictimes.indiatimes.com

• Any person/ bank holder who is not the members of any The following action will be taken if no payment is
statutory social security scheme Can open APY account made towards the scheme

• Age of joining and contribution period: Individuals 1. For six months, the holder’s account will be frozen
who are 18 years and above up to a maximum of 40 years 2. For 12 months, the holder’s account will be
can join the scheme. At the time of exit, subscribers need deactivated
to be at least 60 years. Only after this they will be entitled 3. For 24 months, the holder’s account will be closed
to get guaranteed fixed pension. Based on the entry and
exit years, minimum period of contribution by the V. RECENT DEVELOPMENTS
subscriber under APY would be 20 years or more.
In order to extend the benefit of the APY Government
What is the monthly contribution and mode of will expand its network via Post Offices all over the country so
payment? as to bring more people under its ambit. The implementation of
the scheme through post offices is expected to be more helpful
The following table elaborates on the monthly for the people in rural areas.
contributions based on your pension plan and age.
The government amended the scheme’s provisions in
March 2016, to give the subscriber’s spouse an option to
continue contributing to the account for the balance period on
premature death of the subscriber.
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IJSART - Volume 3 Issue 10 –OCTOBER 2017 ISSN [ONLINE]: 2395-1052

The Government released Rs 100 crore towards its co- designed systematically. Every individual registering for the
contribution for Atal Pension Yojana (APY) in 2015-16 fiscal. scheme will be benefited and it will ultimately create roadway
for the economic growth.
• There won’t be any tax on the amount deposited under
APY and can be claimed under the section 80CCD, as REFERENCES
per government statement.
• Over 20 lakh individuals have been enrolled under the [1] David Blake (2006). Pension Economics.Wiley
scheme so far. [2] David Card & Michael Ransom, 2011. "Pension Plan
• Over 328 Crore has been deposited till now. Characteristics and Framing Effects in Employee Savings
Behavior," The Review of Economics and Statistics, MIT
VI. PENALTY CHARGES Press, vol. 93(1), pages 228-243
[3] European Commission (2006), ―The Impact of Ageing on
This scheme requires regular monthly contributions Public Expenditure: Projections for the EU25 Member
without any break in payments by the subscribers. The States on pension, health care, long-term care, education
government in collaboration with the respective bank can levy and unemployment transfers (2004-2050)‖ European
penalty charges if the subscriber does not make regular Economy Special Report 1/2006.
payments or completely stops contributing, the additional [4] Keith P. Ambachtsheer(2016). The Future of Pension
penalty charges that are levied range from Rs.1 to Rs. 10 every Management: Integrating Design, Governance, and
month Investing. ISBN: 978-1-119-19103-2.
[5] Heller, Peter (2003), ―Who Will Pay? Coping with Aging
How do you make withdrawals from Account? Societies, Climate Change and Other LongTerm Fiscal
Challenges‖ IMF, Washington D.C
Any subscriber, who attains the age of 60 years, is [6] http://www.allonmoney.com/investments/atal-pension-
guaranteed with fix pension amount given to him as per the yojana-details/
contribution done previously with 100% annuitisation of [7] http://economictimes.indiatimes.com
benefits. Only Under specific circumstances like, subscriber’s [8] https://www.npscra.nsdl.co.in/scheme-details.php
untimely death or sudden illness occurring before the age of 60, [9] http://pfrda.org.in/MyAuth/Admin/showimg.cshtml?ID=7
the accrued pension amount will be handed out to the subscriber 14
or the nominee.

Benefits

Contributors of the Atal Pension Yojana (APY) are

eligible for tax benefits according to a circular released by the
Income Tax department. The tax benefits include the additional
deduction of Rs 50,000 under section 80CCD (1) introduced in
last year's Budget. APY brings a big relief for the people from
unorganized as the feeling of financial security comes towards
the post retirement. By enrolling in this scheme, subscribers
will get monthly pension after he/she reaches the age of 60
years.

In case of death of the subscriber (father), the monthly

pension would continue to be paid to the wife and to the child
(if both father and mother die).

VII. CONCLUSION

The Atal Pension Yojana started by the government of

India is empowering the Unorganized Section of India. The
operational framework of Atal Pension Yojana had been

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