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The National Pension System (NPS)'s subscriber base will see gradual growth, the Economic Survey has said. As of May 7 this year, NPS had a subscriber base of 6.71 million.
The survey said the rise in the pension component of NPS (as percentage of gross domestic product) was due to the contributory scheme for fresh entrants (on or after January 1, 2004) to government services, in addition to the outgo under the earlier pension scheme. The pension component alone increased from Rs 15,905 crore in 2003-04 to Rs 74,606 core in 2013-14 (provisional).
As of May 7 this year, NPS had a total corpus of Rs 51,147 crore.
The Swavalamban Scheme for workers in the unorganised sector, launched in 2010, has now been extended to five years for beneficiaries enrolled in 2010-11, 2011-12, and 2012-13. The benefits of co-contribution under the scheme will be available till 2016-17.
Recently, R V Verma, officiating chairman and whole-time member (finance) of Pension Fund Regulatory and Development Authority (PFRDA), had said the regulator aimed to increase NPS subscribers to 10 million subscribers this financial year. He added the entity's assets under management were increasing eight-nine per cent month-on-month.
The Economic Survey said the PFRDA Act, effective February 1, 2014, was among the major milestones of 2013-14. The Act empowers PFRDA to regulate NPS and register and regulate pension funds, as well as the central record keeping agency.
In December 2011, a customised version of the core NPS model, known as the NPS Corporate Sector Model, was introduced to enable entities in the organised sector to move their existing and prospective employees to NPS. All public sector banks, which also act as points of presence for the NPS, have been asked to provide links on their websites to enable individual subscribers to open online NPS accounts.
The Economic Survey said development of the insurance sector was important to support continued economic growth. "It encourages a savings habit, provides a safety net to rural and urban enterprises and individuals, and generates long-term funds for infrastructure development. Social security and pension reforms also benefit from a mature insurance segment," it said.
Against seven insurers in 2000, the sector had 53 insurers as of March 31 this year, across the life, non-life and re-insurance segments.
The Economic Survey said micro-insurance regulations (for small-ticket insurance policies) issued by the Insurance Regulatory and Development Authority have provided the necessary impetus to furthering insurance to the needy. It added insurance penetration (the ratio of premium underwritten in a year to gross domestic product) had risen from 2.3 per cent (life 1.8 per cent; non-life 0.7 per cent) in 2000 to 3.96 per cent (life 3.17 per cent; non-life 0.78 per cent) in 2012. However, a study by reinsurer Swiss Re on world insurance last year showed insurance penetration in India, which had surged consistently till 2009, saw a gradual decline - from 5.2 per cent in 2009-10, it fell to 3.9 per cent in 2013-14.
