India to hike subsidy for overseas pension plan

Apr 17 2014, 20:59 IST
Comments 0
Workers who have an Emigration Clearance Required (ECR) stamp on their passports are eligible to join the scheme. Reuters Workers who have an Emigration Clearance Required (ECR) stamp on their passports are eligible to join the scheme. Reuters
SummaryThe Indian government has increased its subsidy to the co-contributory pension scheme.

An estimated 6,00,000 blue-collar Indian workers in the Emigration Clearance Required category stand to benefit from the Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY), an overseas pension and insurance scheme launched by the Government of India in October of last year.

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 PFRDAís 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 Workersí Resource Centre.

Single Page Format
Ads by Google

More from Personal Finance

Reader´s Comments
| Post a Comment
Please Wait while comments are loading...