A large section of Indian society still lacks access to pensions and this 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), a government-backed pension scheme targeted at the unorganised sector.
The Ministry of Finance has revealed that the APY currently has over 6.9 million subscribers, with total contribution of INR26.9 billion (US$414 million).
"APY has made progress in covering the intended subscribers, but much remains to be done. On an average, a little less than 2% 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% of India's population is over 60 years and by 2030, this figure is expected to cross 180 million. 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.