Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY) – a pension scheme for Indian workers living abroad has been discontinued by the Government of India citing poor response.
The scheme was launched in the UAE in 2012 in its pilot phase before introducing it in 16 other countries.
The objective was to encourage and enable the overseas Indian workers by giving government contribution to save for their return and resettlement (R&R), save for their old age, obtain a life insurance cover against natural death during the period of coverage.
The foreign office is discontinuing three initiatives – a pension-cum-life insurance scheme, short-term academic courses, and a business opportunities platform – a year after it took charge of overseas Indian affairs, according to a report in The Telegraph.
Low number of subscribers
The pension scheme was the only initiative representing the blue-collar workers living abroad but it failed to attract a huge number of subscriptions.
Officials speaking to The Telegraph attributed the lack to demand to the refusal of both, the current Narendra Modi administration and the former Manmohan Singh government to popularise the scheme.
What was the pension scheme
According to the scheme, if a male subscriber deposits Rs 5,000 annually under the scheme (Rs 1,000 through the National Pension System and Rs 4,000 through the UTI Monthly Income Scheme) he would stand to receive Rs 1,000 from the government as a contribution towards his pension and Rs 900 towards the MIS each year.
Women could avail Rs 2,900 as government contribution annually (Rs 2,000 for the pension and Rs 900 for the MIS.)
The scheme also sheltered the subscribers with free cover from the Life Insurance Corporation of Rs 30,000 in the case of natural death, Rs 75,000 in the case of unnatural death or permanent disability due to an accident, and Rs 37,500 for partial disability.
The investment had to be made for five years or the duration of employment abroad, whichever is shorter.
Once back in India, the worker would get the total sum in their MIS account, coupled with the interest earned, as a lump sum. The pension remains in their account, accruing interest till the worker turns 60 and they can avail the money monthly.
NRIs as well as residents have the option of joining National Pension System (NPS). You can read more about it here.
- Complete Guide to National Pension System (NPS) for NRIs
- Top 7 investment options for NRIs to get high returns in India
- NRIs can now invest in National Pension System
Published on 14 February 2017