Providing some relief to senior citizens, the government has doubled the investment limit to ₹ 15 lakh under the PMVVY pension scheme and extended the subscription period, which was to end on Thursday, by two years.
The Pradhan Mantri Vaya Vandan Yojana (PMVVY) is for citizens aged 60 years and above. It was opened for subscription from May 4, 2017 to May 3, 2018. It has now been extended to March 31, 2020.
The scheme provides an assured pension based on a guaranteed rate of return of 8 per cent per annum for ten years, with an option to opt for pension on a monthly, quarterly, half yearly or annual basis.
The decision was taken on Wednesday at the Union Cabinet chaired by Prime Minister Narendra Modi, IT and Law Minister Ravi Shankar Prasad said.
He said the Cabinet has approved increasing the investment limit from ₹ 7.5 lakh to ₹ 15 lakh as well as the extension of subscription period for PMVVY as part of the government’s commitment to financial inclusion and social security.
The move will enable up to ₹ 10,000 pension per month for senior citizens, he added.
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) to provide social security and protect the elderly, 60 years and above, against a future fall in their interest income due to uncertain market conditions.
The difference between the return generated by LIC and the assured return of 8 per cent annually will be borne by the government of as yearly subsidy.
