Govt planning an ‘Universal Pension Scheme’ for all Indian citizens | Reports

The central government is reportedly working on a new Universal Pension Scheme, which will be accessible to all Indian citizens, including those in the unorganised sector. According to media reports, this initiative aims to streamline existing pension frameworks while ensuring financial security for individuals across different employment categories.

Voluntary contributions

Unlike government-backed pension schemes such as the Employees’ Provident Fund (EPF), this new pension plan will operate on a voluntary and contributory basis. The government will not make direct financial contributions but is expected to integrate some existing pension schemes under its umbrella to simplify the pension structure. The proposal will be available to salaried employees, self-employed individuals, and those in informal sectors, such as gig workers, construction labourers, and domestic staff.

Will not replace the National Pension System

Currently referred to as the ‘New Pension Scheme’, this initiative is distinct from the National Pension System (NPS), which remains a voluntary retirement scheme for Indian citizens, including those residing abroad. The new scheme may merge select government-run pension programmes, such as the Pradhan Mantri Shram Yogi Maan-Dhan Yojana (PM-SYM) and the National Pension Scheme for Traders and Self-Employed (NPS-Traders), both of which currently offer a ₹3,000 monthly pension after the age of 60, with contributions ranging from ₹55 to ₹200.

Existing pension plans in India

At present, India has multiple government-backed pension initiatives targeting different sections of society:

Atal Pension Yojana (APY): Designed for the unorganised sector, this scheme provides monthly pensions ranging from ₹1,000 to ₹5,000 post-retirement.

Employees' Pension Scheme (EPS-95): Run by the EPFO, it ensures pension benefits for organised sector employees, with employer contributions covering 8.33% of salaries.

Pradhan Mantri Kisan Mandhan Yojana (PM-KMY): A pension plan for small and marginal farmers, providing ₹3,000 per month after the age of 60.

Pradhan Mantri Vyapari Mandhan Yojana (PMVYMY): Aimed at small traders and self-employed individuals, with similar benefits as PM-KMY.

Swavalamban Yojana (NPS-Lite): A simplified pension plan under NPS, catering to low-income groups.

According to reports, the government’s proposal is being developed under the Employees’ Provident Fund Organisation (EPFO), and once finalised, consultations with stakeholders will commence. There is also a possibility that state-run pension schemes may be integrated with this national-level initiative to optimise contributions, prevent duplication of beneficiaries, and increase pension payouts.

While the government has not yet set a launch timeline, reports suggest that this move could be a game-changer for millions of Indians who currently lack access to structured retirement benefits.