Nirmala Sitharaman Counters Jairam Ramesh's Criticism Of Pension Scheme

Reacting to Jairam Ramesh's remark that Atal Pension Yojana is a "poorly designed scheme", Union Finance Minister Niramala Sitharaman today slammed the Congress general secretary and said that the Congress prefers that the poor should not have pensions so that they are forced to rely on government handouts, which keeps them dependent on "dynasty politicians".

The Congress today attacked the Modi government over the Atal Pension Yojana, alleging it is a "very poorly-designed scheme" and a "paper tiger" that needs officials to hoodwink and coerce people into participating in it.

Lashing out at Congress' criticism of the Atal Pension Yojana, Ms Sitharaman said, "On the Atal Pension Yojana, Jairam Ramesh known for using verbal sophistry to hide facts, is being malicious or is ignorant of the basic tenets of designing a good pension scheme."

She further said that the Atal Pension Yojana is designed based on best practice choice architecture to automatically continue the premium payment unless the subscriber opts out.

"This is a deliberate and beneficial feature which is in the best interest of the subscribers. Instead of requiring people to decide each year to continue, they have to take a decision to discontinue. This makes many of them take the right decision and save for their retirement," she posted on X.

"Richard Thaler (Nobel prize winner in Economics 2017) and Cass Sunstein (a Professor who worked in the Obama administration) are known for their book 'Nudge' which explains the need for proper 'choice architecture' in designing public schemes," she said.

"@Jairam_Ramesh calls it a fixed income pension. He has not bothered to check facts. The minimum return under the APY is guaranteed by the GoI to be at least 8 per cent, regardless of prevailing interest rates and returns. This is an attractive guaranteed minimum return. GoI pays a subsidy to PFRDA to make up for any shortfall in actual returns. If higher investment returns are received on the contributions of subscribers of APY, higher pension would be paid to the subscribers: In fact, currently the returns are more than 8 per cent," she added.

"@Jairam_Ramesh says that people are being 'hoodwinked and coerced' into participating! Hoodwinking is what @INCIndia does always -- in the name of vote bank politics or minority appeasement. Coercion is what was used to make former Chairman of @TheOfficialSBI Shri RK Talwar resign because he refused to give loans to favourites of the dynasty," she said.

The Finance Minister said that as regards the majority of pension accounts being in the lower slabs, for a subsidised scheme intended for the poor and lower middle class, this is obvious.

"In fact, it shows the proper targeting of the scheme. If the offtake was at the higher end, that would be surprising! The elitist mindset of the dynasty and its minions who are constantly thinking of people in the higher echelons of society, perhaps, blinds them to this obvious truth. The @INCIndia prefers that poor should not have pensions so that they are forced to rely on government hand-outs which keeps them dependant on dynasty politicians," she added.

Earlier, Congress general secretary Jairam Ramesh said the scheme is a "fitting representation of the Modi Government's policy making: headline management, with few benefits actually reaching the people".

In a post on X, Ramesh said, "The Finance Minister (Nirmala Sitharaman) was in Bengaluru on the 24th of March, where she was proclaiming the benefits of the Atal Pension Yojana initiated by the Modi Government as its 'flagship social security programme'.

"Just a day later, here's what emerged: Up to a third of the subscribers to this scheme were enrolled into the scheme without 'explicit permission' by officers seeking to meet their quotas," he said sharing the media report on X.

Nearly 83 per cent of the subscribers are in the lowest slab of Rs 1,000 pension, because the monthly contribution for it is low and it goes "unnoticed" by the beneficiaries, he said.

"The 'flagship' Atal Pension Yojana is a very poorly-designed scheme, a paper tiger that needs officials to hoodwink and coerce people into participating in it. It's a fitting representation of the Modi Government's policy making: headline management, with few benefits actually reaching the people!" he said.

On Sunday, the Union Finance Minister hailed the Centre's Atal Pension Yojana and said that a total of 5.26 lakh people have benefited from the scheme only in Bangalore.

Speaking at an informal interaction organised by the Thinkers Forum here, Sitharaman said, "The Atal Pension Yojana has benefited 5.26 lakh poor people aged 60 and above in Bengaluru, alone. As many as 1.95 lakh houses have been sanctioned for urban and rural pockets within Bengaluru, and a total of 1.95 lakh houses have been sanctioned under the PM Awas Yojana. Under the Swachh Bharat Abhiyan, 11 crore or more wholesale toilets have been constructed all over India and 28,075 household toilets have been constructed in Bengaluru."

The Atal Pension Yojana is the government's flagship social security programme launched eight years ago.