New Delhi, May 9 (IANS) India Inc on Saturday welcomed the government’s move to launch three new social security schemes which it said are intended at widening the financial inclusion process.
Industry body Federation of Indian Chambers of Commerce and Industry (Ficci) said that the schemes are important to provide adequate and affordable social protection to all citizens and widen the financial security net to the unorganised and underprivileged sector.
According to the industry body, once the new schemes take-off, they would encourage people to come within the fold of the formal financial system.
Jyotsna Suri, president, Ficci, said that the industry body will partake in the effort to provide the maximum outreach for these schemes.
“We would also connect with our member bodies and regional chambers spread across the country to permeate and share the information further,” Suri said.
Another major industry body, Confederation of Indian Industry (CII), said that linking of the three social security schemes with the bank accounts will go a long way in expanding the penetration of insurance and pension in the country.
“The schemes presage a new era of inclusivity. These (schemes) have been devised and designed in such a way that people will get affordable universal access in the easiest possible manner linked to auto-debit facility from bank accounts,” said Sumit Mazumder, president, CII.
CII added that currently the overall penetration of insurance in the country stands low at only around 4 percent whereas in case of pensions it is estimated that the unorganised sector workers, which constitute about 88 percent of the total labour force does not have any formal pension provision.
Prime Minister Narendra Modi on Saturday evening launched the three new social security schemes during his visit to Kolkata.
He launched the ‘Atal Pension Yojana’ (APY), ‘Pradhan Mantri Suraksha Bima Yojana’ (PMSBY) and ‘Pradhan Mantri Jeevan Jyoti Bima Yojana’ (PMJJBY).
Under the PMSBY scheme, a person will be provided personal accident insurance cover for Rs.200,000 for an annual premium of Rs.12. The cover is for accidental death or permanent total disability.
The scheme will be available to people in the age group of 18 to 70 years with a savings bank account, who give their consent to join and enable auto-debit on or before May 31 for the coverage period – June 1 to May 31 – on an annual renewal basis.
The second scheme PMJJBY, will offer a renewable one year life cover of Rs.200,000 to all savings bank account holders in the age group of 18 to 50 years, covering death due to any reason, for a premium of Rs.330 per annum per subscriber.
On the other hand, the pension scheme APY focuses on the unorganised sector and provides subscribers a fixed minimum pension of Rs.1,000, 2,000, 3,000, 4,000 or 5,000 per month starting at the age of 60 years, depending on the contribution option exercised on entering at an age between 18 and 40 years.
Thus, the period of contribution by any subscriber under APY would be 20 years or more.
The benefit of fixed minimum pension enjoys sovereign guarantee.
While the scheme is open to bank account holders in the prescribed age group, the central government would also co-contribute 50 percent of the total contribution or Rs. 1,000 per annum, whichever is lower, for five years.
The government contribution will be for those joining the scheme before Dec 31, 2015, are not members of any statutory social security scheme and are not income tax payers.