India inching towards credible individual financial security: PFRDA Chairman Supratim Bandyopadhyay

The year 2020 gave financial distress to every individual across the world. In India, low-income and underserved people struggled the most to cope with the catastrophic economic collapse due to Covid-19. The need of creating a financially inclusive system in India has never been more challenging or more significant.

Supratim Bandyopadhyay, Chairman, Pension Fund Regulatory and Development Authority (PFRDA) at FridayLearning, an initiative by Hero Mindmine of Hero Enterprise, spoke about “Role of NPS in Retirement Benefits Planning”, where he discussed pension landscapes, features, and benefits of NPS, retirement benefit schemes, replacement rates on superannuation and answered questions from the audience.

Speaking during the session, Mr. Bandyopadhyay said, “Financial literacy will help raise the standard of living, and investing in NPS will give individuals financial security even after their income sources dry at the time of retirement. With a population of over 1.3 billion, emphasis on financial education will make a long-lasting impact on the populace.”

An incredibly important financial priority is planning for your retirement from an early age. With limited but regular long-term investments, the safest way to prepare for retirement is to rely on the National Pension System (NPS), which is a pension scheme notified by the Government and is available to the public, private and unorganised employees.

PFRDA has witnessed remarkable growth in NPS subscribers over the years with 74.10 lakh government employees in the scheme and 28.37 lakh individuals joining from the non-government sector. “With the total subscriber base of NPS and APY increasing to 4.28 crore in the last fiscal year, the faith of the public in PFRDA has increased tremendously. This achievement shows that due to the pandemic individuals have started giving a lot of importance to financial planning, especially planning for their retirement,” Mr. Bandyopadhyay added.

According to a report by the Global Financial Literacy Excellence Center (GFLEC), only 24% of the Indian adult population is financially literate. In comparison to other major emerging economies, the financial literacy rate in India is amongst the lowest. Mr. Bandyopadhyay explained that inter-state disparities, lack of formal training, and limited awareness about financial concepts are some reasons identified for the above.