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Home > Community
 
India hikes subsidy for overseas pension plan

Sajila Saseendran / 3 April 2014

An estimated 600,000 blue-collar Indian workers in the Emigration Clearance Required category are expected to benefit from the Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY) pension and insurance scheme.

The Indian government has increased its subsidy to the co-contributory pension scheme launched for the overseas Indian workers, Khaleej Times has learnt.

In the UAE, an estimated 600,000 blue-collar Indian workers in the Emigration Clearance Required category are expected to benefit from the Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY) pension and insurance scheme. The male subscribers to the scheme now stand to benefit from double the amount of government contribution, Indian officials associated with the project have confirmed.

As per the scheme, the government will contribute Rs1,000 per annum for male subscribers who save between Rs1,000 and Rs12,000 per year.

This contribution, which comes from the Ministry of Overseas Indian Affairs, has now been complemented with another Rs1,000 from the Pension Fund Regulation and Development Authority (PFRDA) by including MGPSY under PFRDA’s Swavalamban Yojana pension scheme.

Women subscribers, who were already given an additional contribution of Rs1,000 from the ministry, would also be eligible for receiving the PDRFA subsidy.

In addition to this, the ministry had announced a contribution of Rs900 towards return and resettlement of the workers who save Rs4,000 or more per year.

Hence, the government contribution now stands at Rs2,900 for male subscribers and Rs3,900 for female subscribers.

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 as its overseas launch was held here in October last year.

The service providers in the UAE were notified about the increase in the subsidy by the end of February. However, 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 although the decision to increase the subsidy was taken much before the code became effective, officials said.

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. Workers who have an Emigration Clearance Required (ECR) stamp on their passports are eligible to join the scheme.

Though the scheme was launched in the UAE, hardly a few hundreds 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,” said Y. Sudhir Kumar Shetty, COO — Global Operations, UAE Exchange.

“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,” Shetty said.

sajila@khaleejtimes.com

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