Atal Pension Yojana: Features, Significance, Achievements in five years

In a country where around 90% workforce is engaged in an unorganized sector, the framing of social security schemes is a very challenging task. The humungous population with dynamic demographic patterns, diverse socio-economic conditions from state to state, and huge informal sector make the task of designing a foolproof scheme faces many structural and functional challenges. On this backdrop the Atal Pension Yojana, the flagship social security scheme, must be analyzed for its efficacy. Recently, it completed five years of its operation.


What is Atal Pension Yojana (APY)?

  • The APY was launched on 9th May, 2020 with an objective of delivering old age income security.
  • It aims to create a universal social security system for all Indians, especially the poor, the underprivileged and the workers in the unorganized sector.
  • Its objective is to provide subscribers with the fixed minimum pension at the age of 60 years, depending on their contributions.
  • It has replaced the earlier Swavalamban Yojana.

What are the eligibility criteria for joining APY?

  • Any Indian citizen with a savings account in a bank or a post office within the age bracket of 18 to 40 years can join APY. Therefore, the minimum period of contribution by the subscriber is 20 years.
  • The subscriber should not be a member of any other statutory social security scheme.
  • He/she will have to provide the proof of possession of Aadhar number and must undergo enrollment under Aadhar authentication.
  • An APY subscriber will have to get the Aadhar number recorded in his or her APY pension account and also in his/her savings bank account.

Most probable and repeated topics of upsc prelims

Who are the enrollment agencies for APY?

All points of presence i.e. service providers and Aggregators under Swavalamban Yojana would enroll subscribers through the existing architecture of the National Pension System (NPS).

Who is the administrating agency of APY?

  • It is administered by the Pension Fund Regulatory and Development Authority (PFRDA). The NPS architecture is utilized to enroll subscribers under APY.
  • The PFRDA is a statutory authority established by an act of the parliament to regulate, promote, and ensure orderly growth of the NPS and pension schemes to which this act applies.
  • National Pension System (NPS) is a pension cum investment scheme launched by the Government of India to provide old age security to Citizens of India.

Will the government contribute to the subscription?

  • Under APY, The Central government contributes 50% of the subscriber’s contribution upto Rs.1000 per annum.
  • This facility is available to each eligible subscriber who joined APY before 31st March,2016 for a period of 5 years- 2015-16 to 2019-20.
  • The eligible subscriber must also not be a beneficiary of any social security scheme and must not be an income taxpayer.

What are the benefits of APY?

  • The triple benefits of the scheme are
  1. Under APY, subscribers would receive a fixed minimum pension of Rs. 1000 to Rs. 5000 per month, at the age of 60 years, depending upon their contributions which would in turn vary depending upon the age of joining.
  2. In case of death of the subscriber, the spouse of the subscriber shall get the same amount of pension.
  3. In case of death both the subscriber and the spouse, the nominee of the subscriber will receive the pension wealth as accumulated till the age of 60 years of the subscriber.
  • Subscribers have the option to voluntarily exit before 60 years of age subject to certain conditions, on deduction of the contribution of the government and return/ interest thereon.
  • Contributions to the APY is eligible for tax benefits similar to the NPS.

Where does the APY stand vis-a-vis PM Shram Yogi Mandhan Yojana (PMSYM)?

  • Both PMSYM and APY allow workers in the age bracket 18 to 40 years to enroll.
  • The key distinction between the two is that PMSYM caps pension at Rs.3000 whereas APY subscribers can get pension upto Rs.5000.
  • APY is regulated by an independent body i.e. PFRDA and PMSYM comes under the Ministry of Labour.
  • There are a number of exclusions under PMSYM. Workers earning more than ₹15,000 per month or who are subscribers of Employees Provident Fund (EPF) or members of the National Pension System (NPS) or are income taxpayers, are excluded from the PMSYM. These exclusions are not there in APY.

What is the significance of the scheme?

  • The scheme targets the poor and vulnerable unorganized sector workers.
  • The Economic Survey of 2018-19 says that 93% of workers are in the informal economy. Even as they contribute 50% of the national income, these workers do not under formalized sector social security schemes.
  • It is a risk-free scheme and it encourages the poor to save for their retirement.
  • There is a need to cater to the needs of the aging population because of the increasing longevity and declining fertility rate.
  • As per the UN Population Report 2019, by 2050, one among five Indians would be 60 years or above which is the double of the present.
  • APY, therefore, becomes a futuristic scheme taking note of India’s needs of geriatric care in the future.
  • It helps in the financial inclusion of the unorganized sector.

How the scheme has performed till now?

  • The scheme till now has an enrollment base of over 2.3 crore people. During the first two years of its launch, almost 50 lacs subscribers were enrolled which doubled to 100 lacs in the third year and the milestone of 1.50 crore was achieved in the 4th year. In the last financial year, almost 70 lacs subscribers were enrolled under the scheme.
  • The scheme has been comprehensively implemented across all the states and Union Territories.
  • All the stakeholders involved, mainly in distribution channels, like Public and Private Sector Banks, RRBs, Payment Banks. Small Finance Banks, Department of Post have worked well to reach out to the beneficiaries.
  • The gendered enrollment ratio of male to female has been 57:43 which is remarkable by current standards.
  • The facility for upgrading or downgrading of pension slab by subscriber was permitted in 2016 and this facility is available throughout the year now.
  • In 2017, the Mobile App of APY was launched to enable subscribers to access their APY account anytime.

What changes have been made to tackle COVID-19 led difficulties?

The contributions towards APY has been deferred by three months (until June 2020) to address the current scenario of Covid-19 pandemic.

Way forward

  • The deferment of the contributions in the light of the pandemic is a welcome step that allows the most affected subscriber base to fulfill their basic needs first in a situation of economic stress.
  • Though the APY is going strong with over crore subscribers, the unorganized sector is over 45 crores strong. There is a need to step up the efforts in increasing enrollment (currently at 5% of the target population) so that the benefits of the scheme are enjoyed by all of them.
  • The difference between schemes with a similar target population creates confusion (PMSYM and APY). It is the government’s responsibility to promote an appropriate scheme for an appropriate population.
  • It is important to inspire subscribers to contribute regularly so that they get the maximum benefit.
  • It is also important to “Catch them early” so that they are eligible for more amount of pension after retirement.


Notwithstanding the achievements of the scheme so far, there must not be any complacency in the scheme implementation as we still have to go miles when it comes to subscriber base. Wider the social security net of a country, better prepared it for present exigencies and future needs.

Practice Question for Mains

Critically analyze the Atal Pension Yojana for its performance. How is APY different form PM Shram Yogi Mandhan? (250 words)

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