 "Atal Pension Yojana likely to miss December target")
With the number roped in so far being just five per cent of the target, the Pension Fund Regulatory and Development Authority (PFRDA) is working out plans to improve reach and information dissemination. APY numbers are in contrast to the overwhelming response for the other universal security schemes launched simultaneously by the Modi regime, including cover for life and accident. About 120 million policies under the Jan Suraksha Yojana have been sold during this period.
"We have crossed one million subscribers. Though it is much lower than our target, the scheme is picking up now. Huge interest has been shown by the private sector banks. It is challenging to convince people to invest for their retirement," said R V Verma, member (finance) PFRDA.
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PFRDA, the nodal agency for APY, has pitched for an extension of co-contribution incentive by the government beyond December 31 to attract subscribers.
According to the current scheme, the government would co-contribute 50 per cent of the subscriber's contribution or Rs 1,000 per annum, whichever is lower, to each eligible subscriber account for five years to 2019-20. Only those who don't pay income tax can apply for the scheme by December 31.
"We have requested the finance ministry to extend the co-contribution incentive further as it is now that the scheme has started picking pace," said Verma.
The government is also considering the sale of NPS and APY through post offices and business correspondents tied with banks to improve information dissemination and reach for widening of subscriber base.
"We are in consultation with the Department of Posts to sell NPS and APY through post offices to widen the reach. Besides, we are in discussion to rope in business correspondents of banks to sell the scheme on commission basis," added Verma.
State Bank of India has the highest subscribers at about 250,000 by November end, followed by Bank of Baroda and Indian Bank. APY is being sold through 125 institutions across the country, including 27 public sector banks, 17 private banks, close to 50 regional rural banks, district and state cooperative banks.
APY guarantees subscribers a monthly pension of Rs 1,000, 2,000, 3,000, 4,000, or 5,000 in turn for the contribution varying from Rs 42 to Rs 210 per month.
Pension plans are considered tough to sell compared to insurance schemes, as it is difficult to convince people to invest for their retirement, not considered a priority as against uncertainties like accident and life.
"We won't say the response has not been good. It is generally more difficult to convince people to invest in a scheme that will give them returns after 20-30 years," said a public sector banker. "Besides, under APY, we are talking about the unorganised sector here, which makes the convincing task more cumbersome as most are daily wagers," said the bank official.