Budget 2025 likely to double minimum pension under APY
What's the story
The Indian government is reportedly planning to double the minimum guaranteed pension under the Atal Pension Yojana (APY) to ₹10,000.
The proposal is in its final stages of approval and is likely to be announced in the Union Budget 2025 on February 1.
A government official confirmed that "The proposal to double the minimum guaranteed amount to ₹10,000 is in final stages."
APY overview
Atal Pension Yojana: A safety net for vulnerable populations
Launched by Prime Minister Narendra Modi on May 9, 2015, the APY seeks to provide old-age income security for the poor and workers in the unorganized sector.
Named after former Prime Minister Atal Bihari Vajpayee, the scheme currently guarantees a monthly pension between ₹1,000-5,000 after age 60, depending on the contributions made by subscribers during their working years.
Scheme expansion
APY's significant growth and inclusive features
As of October 2024, the APY boasted over seven crore subscribers, including over 56 lakh new subscribers in the financial year 2024-25 alone.
The Pension Fund Regulatory and Development Authority (PFRDA) has been actively promoting APY through outreach programs at the state and district levels and multilingual awareness campaigns.
Subscribers can start contributing as little as ₹42 per month for an 18-year-old wanting a ₹1,000 pension.
Scheme benefits
APY's spousal coverage and guaranteed returns
The APY also offers spousal coverage, guaranteeing the same pension for life if the subscriber dies.
On the death of both subscriber and spouse, the contributed amount with interest is returned to a nominee.
Finance Minister Nirmala Sitharaman had earlier highlighted APY's best-practice choice architecture which ensures premium payment continuity unless opted out by subscribers.
She also said the scheme guarantees a minimum return of eight percent.