The Indian government has increased its subsidy to the co-contributory pension scheme launched for overseas Indian workers, and the government will contribute Rs 1,000 per annum to male subscribers who save between Rs 1,000 and Rs 12,000 per year.
The male subscribers to the scheme are expected to receive double the amount of government contribution, while women subscribers, who were already given an additional contribution of Rs 1,000 from the ministry, would also be eligible for receiving the Pension Fund Regulation and Development Authority (PFRDA) subsidy.
Workers who have an Emigration Clearance Required (ECR) stamp on their passports are eligible to join the scheme.
The contribution, which comes from the Ministry of Overseas Indian Affairs, has been complemented with another Rs 1,000 from the PFRDA by including MGPSY under PFRDAs Swavalamban Yojana pension scheme.
In addition to this, the ministry has announced a contribution of Rs 900 towards return and resettlement of the workers who save Rs 4,000 or more per year.
After the latest update, the government contribution now stands at Rs 2,900 for male subscribers and Rs 3,900 for female subscribers. Besides it, the scheme also provides free life insurance coverage while working outside India.
The early subscribers in the UAE will be the first to benefit from the scheme.
Although service providers in the UAE had been notified about the increase in the subsidy at the end of February, it has not been officially announced due to procedural delays and the Model Code of Conduct which came in place for the upcoming general elections in India. The decision to increase the subsidy, officials said, was taken much before the code became effective.
The objective of the scheme is to encourage and enable overseas Indian workers by giving co-contribution to save for their return and resettlement in India, save for their pension and obtain complimentary life insurance cover during the period of overseas employment.
Though the scheme was launched in the UAE, hardly a few hundred workers have signed up so far. The Indian diplomatic missions and service providers have been trying to promote it by creating more awareness about the scheme. Awareness programmes have so far focused on labour accommodations and the Indian Workers Resource Centre. The increase in subsidy is expected to attract more subscribers.
It is definitely good news for the subscribers. We hope more people would join now, said Sanjay Joshi, senior manager, marketing and retailing at Bank of Baroda, one of the eight service providers for the scheme appointed by the Ministry of Overseas Indian Affairs.
Though there are eight authorised service providers, not all of them are active in the UAE, hampering widespread accessibility of the service to workers. To tackle this challenge, one of the service providers, Alankit Assignments Limited, has tied up with the UAE Exchange to offer the service in the UAE.
We have started accepting applications for the pension scheme. Now, it is easier for workers to subscribe to the scheme as they can walk in to any of our 133 branches across the UAE and apply. Our staff will also be now involved in awareness programmes. They will be in a better position to convince the workers about the benefits of the scheme when they come over for sending money home and also they will spread the word in labour accommodations as part of the campaign, said Y. Sudhir Kumar Shetty, COO, Global Operations, UAE Exchange.