The Cabinet today approved doubling the investment limit to Rs 15 lakh under the government’s flagship senior citizen pension scheme.
The move will guarantee a maximum pension of Rs 10,000 a month under the Pradhan Mantri Vaya Vandana Yojana, according to a government press release. The Cabinet also extended the time limit for subscription to March 31, 2020 from May 4, 2018.
“The earlier investment limit under PMVVY was low,” said Manoj Nagpal, chief executive officer at investment advisory firm Outlook Asia Capital. “It has now been brought on a par with the Senior Citizen Savings Scheme at Rs 15 lakh, which means that a person enrolled under both these schemes will have a pension corpus of at least Rs 30 lakh.”
Launched on May 4 last year, the scheme covers 2.23 lakh senior citizens as of March. This is besides the pension coverage provided by Varishtha Pension Bima Yojana, re-launched in August 2014, to 3.11 lakh senior citizens. Both these schemes are run by Life Insurance Corporation of India.
PMVVY provides an assured pension based on guaranteed a yearly rate of return of 8 percent for a decade. A beneficiary can get the pension monthly, quarterly, half-yearly or annually. The differential return, between the return generated by LIC and the assured return of 8 percent, is borne by the government as subsidy.