The central government is considering launching a drive to provide retirement benefit cover to nearly 380m people in the uncovered workforce in the country, so as to narrow the gap between higher life expectancy and lack of retirement income support.

Inter-ministerial consultations are taking place on how to achieve this goal. “The idea is everyone should be in one of the schemes,” an official told The Financial Express.

Currently, around 120m workers, the bulk of whom in the organised sector, enjoy some kind of retirement benefit under either of the following schemes: Employment Provident Fund (EPF), National Pension System (NPS), PM Shrarm Yogi Maandhan, Pradhan Mantri Kisan Maan-Dhan Yojana, Coal Mines Provident Fund, Assam Tea Plantation Provident Fund, Seamen Provident Fund, and various other superannuation funds. India has an estimated workforce of about 500m, aged 16 to 60 years.

The budgetary impact of the pension drive, which may include giving incentives to the workers and employers, and administrative set-ups, would need to be assessed, keeping in view the availability of funds.

“Providing fiscal incentives without people being aware of the incentives won’t help. There is a need to start a serious campaign to wake up these 38 crore people that they need to save for retirement,” said Mr Gautam Bhardwaj, co-founder of pinBox, a global pensionTech committed to digital micro-pension inclusion in Asia and Africa.

“If the government does so, then you might end up in a situation where you have $500bn of additional long-term savings over the next 10 years in India. These new savings will also benefit the economy and markets, besides boosting infrastructure investments and overall economic development.”

To make pensions universal, preliminary discussions suggest that the government is keen on a drive similar to ‘Pradhan Mantri Jan-Dhan Yojana (PMJDY), which is a government-backed financial inclusion scheme to help low-income people access banking, insurance, remittances, etc. Since its launch in August 2014, 437m people have opened bank accounts.

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