Pradhan Mantri Yojana – A Step Towards Bigger Financial Inclusion

Three Pradhan Mantri Yojana have been introduced aiming at a wider financial inclusion. Pradhan Mantri Jeevan Jyoti Yojana and Pradhan Mantri Bima Suraksha Yojana  are already launched and Pradhan Mantri Atal Pension Yojana will come into existence from 1^st June 2015.The objective of these schemes is to give social security to the large unorganized  sector workers of the Indian society which has largely been deprived of any such benefits and thus has remain financially poor.

The success of these scheme  can be debated to some extent  but it’s not a hidden fact that these people has largely remain unnoticed and social security schemes like these gives a huge breather to them.

What are these schemes and what benefits they provide to whom is what I have highlighted in the below article:

 Pradhan Mantri Bima Yojana

There are two insurance schemes which have been launched. Pradhan Mantri Jeevan Jyoti Yojana and Pradhan Mantri Suraksha Bima Yojana. The first is a life insurance scheme which gives a lump sum benefit to the family if the policy holder dies. Contrary to this Suraksha Bima Yoajna is an accidental insurance scheme which covers death due to accident as well as disability arising from it.  A family can avail both these schemes.

Given below is a snapshot of the features of these two schemes

Chart	Pradhan Mantri Jeevan Jyoti Yojana	Pradhan Mantri  Suraksha Bima Yojana
Eligibility	18-50 Yrs.	18-70 Yrs.
Policies	One per person	One per person
Sum Assured	Rs 2 lakh	Rs 2 lakh
Premium	Rs 330 p.a.	Rs 12 p.a.
Maturity Benefit	Nil	Nil
Death Benefit	Rs 2 lakh	Rs 2 Lakh – AccidentalNil            – Natural
Disability	Nil	Rs 2 lakh- Disability of Both Eyes , both hands, both legs or one eye and one limbRs 1 lakh- Disability of one eye or one limb
Maximum Cover	Rs 2 lakh	Rs 2 lakh
Cover ceasing age	55 yrs.	70 yrs.
Risk Period	June 1st to 31st May	June 1st to 31st May
Premium Payment	Auto debit from bank account every year in month of May	Auto debit from bank account every year in Month of may

As you can see above the primary benefit in Jeevan Jyoti Yojana is the death cover while in Sursaksha Bima Yojana it the accidental death or disability. While availing these two one has to keep following points in consideration-

1. Both the insurances are applicable only if you have a banking account linked to Adhaar.
2. You can opt for insurance only once even if you have multiple accounts. If you pay the premiums from multiple accounts barring one all others will be forfeited.
3. You can enter in this scheme at any time of the year.
4. In both schemes you have to apply every year.
5. The premium has to be paid by 31^st May. If you pay the premium after this date then the cover will start from the next month. So if premium is paid on 14^th June the cover starts form 1^st July. Only for 2015 exemption has been given till August 2015 which can be extended to November 2015 if government think so.
6. For paying the premium an auto debit form has to be submitted and your premium will be debited from your bank account.
7. There is no medical test in these schemes and you have to give a health declaration statement while submitting application.
8. If your cover is being discontinued due to any reason you can rejoin the scheme by filling a health declaration scheme.
9.  One can have one scheme of both i.e. Jeevan Jyoti Yojnaa and Surakasha Bima Yojna. If death happens due to accident then claim from both policies is payable.
10. You can either opt for scheme every year or opt for a long term payment benefit wherein every year the premium will get debited from your account.

 

Pradhan Mantri Atal Pension Yojana

This is the third scheme in the line of PradhanMantri Yojana. It’s a replacement of the NPS Swavlamban Scheme and is aimed at providing a fixed pension to the people from unorganized sector . Under this scheme the subscriber at age 40 or below will receive a fixed pension of Rs 1000 to Rs 5000 from age 60 years which will be based on the contributions made. To ensure more people subscribe to these scheme the government will be contributing to the subscriber account 50% of the contributions or Rs 1000 p.m. whichever is lower.This benefit will be there for five years and will be available to subscribers joining before December 31^st 2015.

Here are broad features of the scheme

1. Any person from age 18 yrs. can contribute to the scheme. Once started the contribution will end at 60  yrs. of age.
2. The subscriber need to have  a bank account linked with Adhaar.
3. There is no exit from the scheme before the age of 60 yrs. except in the case of death of subscriber.
4. If the subscriber dies the pension will be available to his wife and after her death the purchase price will be return to the nominee.
5. At 60 the subscriber will have a choice of 100% annuitization of the accumulated amount.
6.  The contributions to this scheme happens by auto debit from subscribers account.
7. The bank will levy penalty if there are delays or contribution missed.
8. The policy can also be discontinues in certain contributions.

 

Below is a table for Atal Pension Yojana scheme showing the level of contribution the subscriber has to make to receive a specific guaranteed pension.

Indicative Monthly Contribution Chart

Age of Entry	Monthly pension Of Rs 1000	Monthly pension of Rs 2000	Monthly pension of Rs 3000	Monthly Pension of Rs 4000	Monthly pension of Rs 5000
18	42	84	126	168	210
20	50	100	150	198	248
25	76	151	226	301	376
30	116	231	347	462	577
35	181	362	543	722	904
40	291	581	873	1164	1454

As can be seen from the above table to earn a pension of Rs 5000 p.m. and you start at age 18 you will have to contribute Rs 210 p.m. while if you start at age 40 you will have to contribute Rs 1454 p.m. to receive the same pension amount. So early you avail less you contribute. Moreover 50% of this contribution will be paid by GOI if you are not covered from any other social security scheme and you are not a tax payer.

Other Features

The contribution gets debited directly from your bank account. If any of your contributions gets delayed then banks will be deducting penalty starting from Rs 1 per month at Rs 100 per month contribution up to Rs 10 per month at Rs 1001 per month contribution. But if the payment is discontinued for specific period then your accounts will get closed. So if it is for 6 months the account will get frozen while if the discontinuation is for 12 months the account will get closed.

 Conclusion

Looking at features of all the above three schemes it can be said that the beginning to provide social security benefit to large number of unorganized people is really good. How success of these schemes will span out time will tell but if implemented properly and the benefit is passed on to the real subscriber it will go a long way in establishing a social security system to the large section of society which has remained uncovered. Jan Dhan Yojana was a good start to bring the non-banking population in the sphere of banking services and with it the distribution of these schemes will be easier.  It’s time that we make aware our maid, driver, maali or any other persons working at our home about these benefit. Let  us also contribute to the noble cause aimed at betterment of our society where we are living.

 What you think about these schemes? Are you taking initiative to appraise your surroundings about these  benefits?

Share your views in the comments section…