Low-cost pension plans launched for farmers, traders & self-employed

Prime Minister Narendra Modi has launched national voluntary pension schemes for farmers, small traders and the self employed. The terms of the schemes are largely similar.

Farmers

Under the farmers’ pension scheme known as Pradhan Mantri Kisan Mandhan Yojana (PMKMY), agrarians between 18 and 40 years of age will get a fixed minimum monthly pension of INR3,000 ($42) after they reach the age of 60. However. only farmers with a landholding of two hectares or less are eligible to subscribe to the scheme.

The registered farmer has to pay a premium of INR55 to INR200 per month, depending on age.

Traders and self-employed

For traders and the self-employed who have an annual turnover of up to INR15m, those who are aged 18-40 are eligible to be subscribers and will receive a minimum monthly pension of INR3,000 when they reach the age of 60. They have to make monthly contributions to the pension scheme which is named Pradhan Mantri Laghu Vyapari Maan Dhan Yojana for shopkeepers and retail traders and 'Swarojgar' for self-employed persons.

The government is targeting 2.5m traders to be subscribers in FY2019-20 and 20m by FY2023-24. For all the schemes, the government will contribute a sum which is equivalent to the premium paid by a subscriber. The monthly contributions are kept low to make the pension schemes affordable.

Source: Asia Insurance Review