Why in news ?
Finance Minister Arun Jaitley has formally launched the Pradhan Mantri Vaya Vandana Yojana (PMVVY), or a pension scheme, for senior citizens.
What is the aim of the scheme ?
Under this scheme, senior citizens (60 years and above) in which they will get a guaranteed interest of 8 per cent for 10 years. Pension scheme will offer more avenues to senior citizens to earn steady regular income at a time of falling interest rates. The scheme is exempted from GST or goods and services tax.
- PMVVY can be purchased offline as well as online through Life Insurance Corporation (LIC) of India which has been given the sole privilege to operate this scheme.
- The scheme will provide an assured return of 8 per cent per annum payable monthly (equivalent to 8.30 per cent per annum) for 10 years.
- The 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.
- There is a minimum and maximum limit for investment in Pradhan Mantri Vaya Vandana Yojana Scheme. The amount varies according to the pension payment mode chosen.
- On survival of the pensioner to the end of the policy term of 10 years, purchase price along with final pension instalment shall be payable.
- Loan up to 75 per cent of purchase price (amount invested to earn pension) shall be allowed after three policy years to meet the liquidity needs.
- The scheme also allows for premature exit for the treatment of any critical/ terminal illness of self or spouse. On such premature exit, 98 per cent of the purchase price shall be refunded.
- On death of the pensioner during the policy term of 10 years, the purchase price shall be paid to the beneficiary.
Source : Pib
GS II : Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections