The Universal Pension Scheme is an attempt by the Indian government to ensure social security for all, especially people working in the unorganised sectors. Compared to other employment-specific pension plans, this self-centred initiative hopes to reduce the complexity of the different pension plans available by consolidating them into an easy-to-use system. This is a step in the financial preparedness for India’s increasingly aged citizens.
Read More: A Complete Guide On Unified Pension Scheme (UPS)
Why Is The Universal Pension Scheme Needed?
The Universal Pension Scheme will play a significant role in providing a financial cushion for India’s rapidly increasing aged population. With the increased life span and minimal retirement benefits, there is an urgent need for robust social security. Some reasons are highlighted below:
Boosting the Elderly Population: The elderly (60+) population in India is estimated to reach 227 million by 2036. Therefore, there is an enormous need for climbing social security.
Absence of Social Security Coverage: Unlike developed superpowers, India’s pension scheme is employment-based. So, workers in the unorganised sectors don’t benefit from the pension plan.
Coverage of Other Existing Pension Schemes: This new scheme intends to streamline several such existing pension schemes including:
Universal Financial Freedom: Enables self-employed individuals, as well as everyone, irrespective of job status to plan for retirement through voluntary contributions.
Read More: Supreme Court Delivers: Pension Scheme Verdict
Conclusion
If implemented, the Universal Pension Scheme has the potential to transform the entire perspective of pensions in India. The scheme, especially aims to benefit senior citizens belonging to the unorganised sectors of society. The initiative seeks to merge several existing pension schemes which will enable easy access, and active participation, and offer a more stable income during the retirement years to millions.
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