A universal pension plan for every individual in the country in the age group of 18 to 60 years have been launched by the Government of India. As per the scheme, a person in the prescribed age group has to pay a monthly amount till be attains the age of 60 years and after that can receive a pension every month. For example if a person aged 18 years makes a monthly payment of Rs 316/- till he attains 60 years, he would be eligible to receive a monthly pension of Rs 5000/- after 60 years. On the face of it the scheme appears to be a very good one, but a deeper analysis may not show the flowery picture.
First and foremost is the value of Rs 5000/- after 40 odd years! What will he be able to do with this Rs 5000/- at that time? Will it be of any help to that person in terms of monetary value?
Second question is how the government plans to deploy the funds collected under the scheme. Will there be a separate corpus created from this funds for payment of pension and will it be invested in the market to yield sufficient return? How a person can be sure of getting the monthly pension after attaining the age of 60 years? Isn't it too long a period? In this context, it is worthwhile to recollect similar schemes launched by some public sector organisations in the past and subsequently withdrawn. My reference is to the "Rajalakshmi scheme" floated by UTI for girl students which was withdrawn in 2001, "Deep Discount Bond" issued by IDBI in 1992, Perennial Pension Plan introduced by State Bank of India in 1990s and subsequently withdrawn. Who can predict the financial conditions about 40 years down the line and make a commitment now? And what stand will the government of the day after 40 years take in the matter.
I request the great economists of the country including the Governor of RBI to consider the above issues and advise the Government and public suitably in the matter
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