Atal Pension Yojana May Double in Budget 2024-25

New Delhi: Finance Minister Nirmala Sitharaman is set to unveil the first budget of the Modi 3.0 government on July 23rd. Discussions focused on providing relief to the poor and low-income earners are ongoing in the Union Budget 2024-25. Amidst these deliberations, there is speculation that the government might double the pensions provided under the Atal Pension Yojana. This potential announcement, expected during the upcoming budget presentation, is currently being evaluated for its fiscal implications.

According to sources cited in a report by the Economic Times, the government is considering doubling the guaranteed pension amount under the Atal Pension Yojana to ₹10,000. This move, if implemented, aims to enhance the attractiveness of the pension scheme. Various proposals are under review, including the enhancement of the guaranteed pension amount.

Currently, subscribers of the Atal Pension Yojana receive pensions ranging from ₹1,000 to ₹5,000 per month, depending on their monthly contributions. Contributions under the scheme vary based on the subscriber’s age, with younger individuals requiring lower monthly contributions. For instance, starting contributions at the age of 18 towards a ₹5,000 monthly pension after reaching 60 years would necessitate ₹210 per month, compared to ₹42 for a ₹1,000 pension.

The Atal Pension Yojana, introduced by the Indian government, specifically targets providing guaranteed pensions post-retirement, particularly for the poor and workers in the unorganized sector. Eligibility for the scheme extends to all Indians aged between 18 and 40, with exceptions for those who commenced income tax payments from October 1, 2022.

As of June 20, 2024, approximately 6.62 crore accounts have been opened under the Atal Pension Yojana, with 1.22 crore new accounts added during the fiscal year 2023-24. Finance Minister Nirmala Sitharaman highlighted in her March 2024 statement that the scheme has delivered a competitive return of 9.1% since its inception.

Given the current inflationary pressures, a ₹5,000 pension may not adequately meet retirees’ needs. Therefore, if the government decides to double the pensions under the Atal Pension Yojana to ₹10,000 in Budget 2024, it could significantly aid the vulnerable sections in coping with inflation. Additionally, discussions are underway regarding potential relief measures in the income tax domain, including a possible increase in the standard deduction limit under the new tax regime from ₹50,000 to ₹75,000 or even ₹1 lakh.

Final decision on this will be seen when Finance Minister Nirmala Sitharaman presents the budget on July 23rd, providing crucial insights into the government’s fiscal policies and welfare initiatives.