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The Union Cabinet has given its approval to the Extension of Pradhan Mantri Vaya Vandana Yojana (PMVVY) and other changes for the welfare of and to enable old age income security for Senior Citizens.
Changes for the Welfare of the aged
- Extension of Pradhan Mantri Vaya Vandana Yojana (PMVVY) up to 31st March, 2023.
- Revised rate of returns of Senior Citizens Saving Scheme (SCSS).
- Approval for expenditure to be incurred on account of the difference between the market rate of return generated by LIC.
- The minimum investment has also been revised to Rs.1,56,658 for pension of Rs.12,000/- per annum and Rs.1,62,162/- for getting a minimum pension amount of Rs.1000/- per month under the scheme.
Pradhan Mantri Vaya Vandana Yojana (PMVVY)
- Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a Pension Scheme announced by the Government of India exclusively for the senior citizens aged 60 years and above.
- PMVVY is a social security scheme for senior citizens intended to give an assured minimum pension to them based on an assured return on the purchase price / subscription amount.
Major Benefits of PMVVY
- Scheme provides initially an assured rate of return of 7.40 % per annum for the year 2020-21 per annum and thereafter to be reset every year.
- Annual reset of assured rate of interest with effect from April 1st of financial year in line with revised rate of returns of Senior Citizens Saving Scheme (SCSS) upto a ceiling of 7.75% with fresh appraisal of the scheme on breach of this threshold at any point.
- Pension is payable at the end of each period, during the policy term of 10 years, as per the frequency of monthly/ quarterly/ half-yearly/ yearly as chosen by the pensioner at the time of purchase.
- The scheme is exempted from GST.
- On survival of the pensioner to the end of the policy term of 10 years, Purchase price along with final pension installment shall be payable.
- The shortfall owing to the difference between the interest guaranteed and the actual interest earned and the expenses relating to administration shall be subsidized by the Government of India and reimbursed to the Corporation.