21 May, 2020
7 Min Read
Pradhan Mantri Vaya Vandana Yojana-PMVVY – OLD AGE & Senior Citizens
Part of: GS-I- Social issues (PT-MAINS-PERSONALITY TEST)
PMVVY is a social security scheme for senior citizens intended to give an assured minimum pension to them based on an assured return on the purchase price / subscription amount.
(a) Extension of Pradhan MantriVayaVandanaYojana (PMVVY) up to 31st March, 2023 for further period of three years beyond 31st March, 2020.
(b) To allow initially an assured rate of return of 7.40 % per annum for the year 2020-21 per annum and thereafter to be reset every year.
(c) Annual reset of assured rate of interest with effect from April 1st of financial year in line with revised rate of returns of Senior Citizens Saving Scheme (SCSS) upto a ceiling of 7.75% with fresh appraisal of the scheme on breach of this threshold at any point.
(d) Approval for expenditure to be incurred on account of the difference between the market rate of return generated by LIC (net of expenses) and the guaranteed rate of return under the scheme.
(e) Capping Management expenses at 0.5% p.a. of funds of the scheme for first year of scheme in respect of new policies issued and thereafter 0.3% p.a. for second year onwards for the next 9 years.
(f) Delegating the authority to Finance Minister to approve annual reset rate of return at the beginning of every financial year.
(g) All other terms and conditions of the scheme remaining the same.
The minimum investment has also been revised to Rs.1,56,658 for pension of Rs.12,000/- per annum and Rs.1,62,162/- for getting a minimum pension amount of Rs.1000/- per month under the scheme.
Analysis for MAINS
National Elderly Policy defines person of 60+ age group as elderly.
Population figures on ageing
Age division of Indian population (0-14) is 30.8%, (15-59) is 60.3%, (60+) is 8.6%. According to Population Census 2011, there are nearly 104 million elderly persons in India. It has increased from 5.5% in 1951 to 8.6% in 2011. Projected a rise upto 19% in 2050. As regards rural and urban areas, more than 73 million persons i.e. 71% of elderly population resides in rural areas while 31 million or 29% of elderly population are in urban area.
Feminisation of ageing
Problems associated with old age
Recent initiatives by government
Integrated Programme for Older Persons (IPOP)
Ministry of Social Justice and Empowerment is a nodal agency for the welfare of elderly people. The main objective of the scheme is to improve the quality of life of older persons by providing basic amenities like shelter, food, medical care and entertainment opportunities, etc.
Rashtriya Vayoshri Yojana (RVY)
Indira Gandhi National Old Age Pension Scheme (IGNOAPS)
The Ministry of Rural Development runs the National Social Assistance Programme (NSAP) that extends social assistance for poor households for the aged, widows, disabled, and in cases of death where the breadwinner has passed away.
Under this scheme, financial assistance is provided to person of 60 years and above and belonging to family living below poverty line as per the criteria prescribed by Government of India. Central assistance of Rs 200 per month is provided to person in the age group of 60-79 years and Rs 500 per month to persons of 80 years and above.
Varishtha Pension Bima Yojana (VPBY)
This scheme is run by the Ministry of Finance. The Varishtha Pension Bima Yojana (VPBY) was first launched in 2003 and then relaunched in 2014. Both are social security schemes for senior citizens intended to give an assured minimum pension on a guaranteed minimum return on the subscription amount.
The Pradhan Mantri Vaya Vandana Yojana
The Pradhan Mantri Vaya Vandana Yojana (PNVVY) was launched in May 2017 to provide social security during old age. This is a simplified version of the VPBY and will be implemented by the Life Insurance Corporation (LIC) of India.
Under the scheme, on payment of an initial lump sum amount ranging from Rs 1,50,000 for a minimum pension of Rs 1000 per month to a maximum of Rs 7,50,000/- for a maximum pension of Rs 5,000 per month, subscribers will get an assured pension based on a guaranteed rate of return of 8% per annum payable monthly/quarterly/half-yearly/annually.
The Centre will bear 75 percent of the total budget and the state government will contribute 25 percent of the budget, for activities up to district level.
Conferred as a National award, and given to eminent senior citizens & institutions under various categories for their contributions on International day of older persons on 1st october.
Role of SOCIETY
Elderly peoples carries immense experience of their personal and professional life, society at large need to channelise those experience for better tomorrow.
Increasing the monthly pension of elderly to minimum of Rs 2,000 per month.
For the welfare and care for the older persons, we must focus on the protection of already existing social support systems/traditional social institutions such as family and kinship, neighborhood bonding, community bonding and community participation must be revived and kins should show sensitivity towards elderly citizens.
Social security is the concurrent responsibility of the central and state governments as, mandated under Indian constitution i.e, Well-being of senior citizens – Article 41 in particular and 46 in general of Indian constitution. In this regard, National Policy on Senior Citizen, 2011 was framed.
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