People independently lead their life and dedicated it in the raising and upbringing of their family and the contributing in national development, have to suddenly depend on others. They are also part of the economy. They contribute to market development in several ways. Hence, looking upon their steady source of income, even when they are not eligible enough to contribute their services and efforts like others, is also the responsibility of a government, organizations and nation as a whole.
As per a report by the United Nations, by the year 2050, 22% of the world’s total population will consist of elderly people. It is approximately 2 billion people with the world population growing to 9 to 10 billion people.
This is because suddenly the world governments wake up from a long sleep to understand the exploding population problem and have started launching campaigns to slow the pace of population growth. This, in turn, will soon result in a large number of the population turning old with comparatively less youth.
This will have an impact on the economic aspects of a nation. Factors like financial and labour markets, goods and services, transportation, housing, social protection and health industry need to prepare from today onwards to handle the global impact of population transformation.
Abilities and requirements of the ageing population call for policy and programme formulation at all levels. The government needs to attend the public health care systems, social protection and pensions policies and programmes to address this issue.
Out of this, the Indian population will encompass around 30 crore elderly people by 2050. Understanding its responsibility, the Indian government along with various other national-level organisation have come up with policies and programmes to support the elderly in their resting years.
1. Senior Citizens Saving Scheme (SCSS):
Government of India has collaborated with banking entities from the public and private sector to provide a saving scheme to the senior citizens of India, who are above the age of 60 years. This scheme offers the elderly with a saving instrument for a 5-year term. Any Indian citizen above the age of 60 years can avail the benefit of depositing their saving with one of the many Indian banks. This service can otherwise also be availed through a post office. A depositor will be served with an interest in the deposit amount, accruing and credible every quarter.
Government of India reviews the rate of interest for these schemes every quarter. The rate of interest for this scheme for the previous quarter Jan-Mar, 2019 was 8.6% per annum. Further, the senior depositer is at the option of extending the term from 5 years to 8 years (3 years extension)
The deposit can be made for a minimum of Rs. 1000 with a threshold top of Rs. 15 lakh. The scheme is supported by the Income Tax Department and any investment made under this scheme is exempted from taxation. However, if the depositor wishes to withdraw the amount within 2 years of making the deposit, then 1.5% of the total deposit amount will be deducted as a pre-mature withdrawal charge. This charge reduces to 1% is the withdrawal is made anytime after 2 years and before the maturity period.
2. Pradhan Mantri Vaya Vandana Yojana (PMVVY)
The scheme is managed by the Life Insurance Corporation of India (LIC), the scheme assures a benefit of 8% p.a. on the deposit. Just like the previous scheme, here also, a deposit can be made for a minimum of Rs. 1000 with a threshold top of Rs. 15 lakh. The beneficiary can deposit for up to 10 years term.
If a situation like illness or any other emergency occurs, the depositoor can make a pre-mature withdrawal and will be charged 2% of the deposit amount for doing so. The scheme has no income tax exemption. Also, it can only be exercised by or before 30 March 2020. In case of the death of the beneficiary, the amount will be endowed to the person nominated by the deceased.
3. Varnnish Pension Bima Yojana
Another scheme by LIC where you can deposit a lock-in 15 years. With an 8% p.a interest rate, the scheme also offers tax exemption on the deposits made. After the retirement, the policyholder will start to yield benefit from the scheme through periodical pension payout. They can be monthly, quarterly and yearly at the option of the policyholder.
Unlike other schemes, the policyholder need not get a medical checkup under this scheme. Further, the premature withdrawals can also be made in case of an emergency at a payment of 2% of the deposit amount as charges. The scheme offers tax exemption. The policy is based on the single premium method and the premium shall vary with the pension payout amount. You can receive benefits of Rs. 1000 to Rs. 60,000 a month in terms of payouts at the cost of single premium payment accordingly.
4. Rashtriya Vayoshri Yojana (RVY)
The scheme was launched in 2017 by the Government of India’s Ministry of “Social Justice & Empowerment” Ministry. The scheme is made for senior citizens living below the poverty line i.e. BPL cardholders. A committee made in this regard determines the eligibility for the scheme.
Further, the beneficiary who is suffering from low vision, hearing impairment, loss of teeth, and locomotor disability are provided with relevant medical assistance devices. Aids like walking sticks, elbow crutches, walkers, hearing aids, wheelchairs, and artificial dentures are provided under this scheme to the beneficiaries. The scheme has a clause that 30 per cent of the total beneficiaries from each district will be women.
5. Indira Gandhi National Old Age Pension Scheme
Another scheme to benefit senior citizens from the BPL sector of society. The scheme is popularly known as the National Old Age Pension Scheme (NOAPS). It was launched by the Ministry of Rural Development of India in 2007.
The beneficiary receives monthly pensions and need not contribute any principal or deposit towards the scheme. However, BPL cardholder who does not have any other source of income can only avail this benefit. A basic monthly payment of Rs. 200 to Rs. 500 is paid to the beneficiary by crediting the amount to their respective saving bank account.
Many times it is seen that elder people, who have either retired from their jobs or are about to or have been home-maker for years, after reaching a certain age, have to rely on their daughters and sons for their living. Those who do not have anyone to support them in their older days, have to struggle a lot to make a safe, secure and normal living. These schemes are one of the many steps by the Indian government to ease the problems of the elderly.
These are some of the most important scheme and many people around us are not aware of the benefits of the same. Convey this to those who are in need and can take benefit for the same.
Note: Although the information has been well sought by us about each scheme, do read the original policy/scheme documents for the latest and exact clauses and terms, before investing into the same.