The cabinet has approved the doubling of investment limit in Pradhan Mantri Vaya Vandan Yojana (PMVVY) to Rs.15 lakh from the current level of Rs.7.5 lakh. According to the government press release, under the PMVVY scheme, this move will guarantee a maximum pension of Rs.10,000 a month. Additionally, the cabinet has also approved the period for subscription of this scheme from May 4, 2018, to March 31, 2020.
Manoj Nagpal, Chief Executive Officer at Outlook Asia Capital, was quoted in media saying, “The benefit has now been brought on a par with the Senior Citizen Savings Scheme at Rs.15 lakh, which means that an individual enrolled under both these schemes will have a pension corpus of at least Rs.30 lakh.”
The Pradhan Mantri Vaya Vandan Yojana (PMVVY) is for citizens aged 60 years and above. The scheme grants a guaranteed pension based on a rate of return of 8 percent per annum for ten years, with an option to opt for a pension on a monthly, quarterly, half-yearly or annual basis.
As of March 2018, 2.23 lakh senior citizens had subscribed to PMVVY. In the previous scheme, Varishtha Pension Bima Yojana-2014, 3.11 lakh senior citizens have invested. The PMVVY is being implemented through Life Insurance Corporation of India (LIC). The scheme aims to provide social security and protect the elderly, aged 60 years and above, against a future fall in their interest income due to uncertain market conditions. As a yearly subsidy, the Government will bear the difference between the return generated by LIC and the assured return of 8 percent annually.