The Centre has released nearly 100 crore rupees as its share of contribution for members of the Atal Pension Yojana. The fund has been released through the Pension Fund Regulatory and Development Authority. The scheme has over 30 lakh subscribers and the Finance Ministry estimates that about 5,000 new subscribers are added every day.
About Atal Pension Yojna (APY):

• Benefit of APY: Fixed pension for the subscribers ranging between Rs. 1000 to Rs. 5000, if he joins and contributes between the age of 18 years and 40 years. The contribution levels would vary and would be low if subscriber joins early and increase if he joins late.
• Eligibility for APY: Atal Pension Yojana (APY) is open to all bank account holders who are not members of any statutory social security scheme.
• Age of joining and contribution period: The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.
• Focus of APY: Mainly targeted at unorganised sector workers.
• Enrolment and Subscriber Payment: All bank account holders under the eligible category may join APY with auto-debit facility to accounts, leading to reduction in contribution collection charges.
• Late payment: Late payments will be charged be Re1 to Rs10 per month depending on the contribution amount.
• Operational Framework of APY: It is Government of India Scheme, which is administered by the Pension Fund Regulatory and Development Authority. The Institutional Architecture of NPS would be utilised to enrol subscribers under APY.
• Funding of APY: Government would provide (i) fixed pension guarantee for the subscribers; (ii) would co-contribute 50% of the subscriber contribution or Rs. 1000 per annum, whichever is lower, to eligible subscribers; and (iii) would also reimburse the promotional and development activities including incentive to the contribution collection agencies to encourage people to join the APY.

Analysis:

• APY as a scheme appears to be very simple and easy to understand. It tends to simplify every aspect related to it; from applying to withdrawing.
• Automatic deductions from the linked bank account eliminates chances of investor forgetting to make a payment and thereby losing out on the benefits.
• Also, subscriber need not have any specific identity card to be a part of the scheme and allows easy access due to linkage to the bank account.
• The amount 1000 to 5000 per month will be too low even 20 years from now, given the inflation. Besides, average life expentancy in India is 67 years.
• Low return on investment if inflation is taken into account the picture becomes worst.
• Near sighted rural poor would not find it lucrative to invest for 20 years and reap benefits for an uncertain period ranging from 6-7 years.