Story Of The Week

New social security schemes – Initiative of Modi Government or just old wine in new bottle?

Another feather is added in Prime Minister Narendra Modi’s cap with launch of three new social security schemes – Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana and Atal Pension Yojna. Announcement of these schemes was made in the 2015 Budget speech by Finance Minister Arun Jaitley in February 2015.

Currently only 20% of India’s population is covered under any insurance scheme. For such a huge nation as ours, this is too less a number. Inspired by the success of Pradhan Mantri Jan Dhan Yojna, these schemes have been launched to increase this percentage.


Features of the schemes:

  1. Pradhan Mantri Suraksha Bima Yojana (PMSBY)

Eligibility: People in age group 18 to 70 years with bank account.

Premium:  Rs 12 per annum.

Risk Coverage:  For accidental death and full disability – Rs 2 Lakh and for partial disability – Rs 1 Lakh.

  1. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

Eligibility: People in the age group of 18 to 50 and having a bank account.

Premium:  Rs 330 per annum.

Risk Coverage: Rs. 2 Lakh in case of death for any reason.

  1. Atal Pension Yojna (APY)

Eligibility:  All bank account holders who are not members of any statutory social security scheme. The minimum age of joining APY is 18 years and maximum age is 40 years. One needs to contribute till one attains 60 years of age.




Detailed table of monthly instalments is given below.

 Age of Joining Years of Contribution Indicative Monthly Contribution for Monthly Pension of Rs 1000 and Corpus of Rs 1.7 Lakh(in Rs.) Indicative Monthly Contribution for Monthly Pension of Rs 2000and Corpus of  Rs 3.4 Lakh(in Rs.) Indicative Monthly Contribution for Monthly Pension of Rs 3000 and and Corpus of Rs 5.1 Lakh(in Rs.) Indicative Monthly Contribution for Monthly Pension of Rs 4000 and Corpus of Rs 6.8 Lakh(in Rs.) Indicative Monthly Contribution for Monthly Pension of Rs 5000 and Corpus of  Rs 8.5 Lakh(in Rs.)
18 42 42 84 126 168 210
20 40 50 100 150 198 248
25 35 76 151 226 301 376
30 30 116 231 347 462 577
35 25 181 362 543 722 902
40 20 291 582 873 1164 1,454


All these schemes have received enormous response from public. About seven crore people have already enrolled in these schemes cumulatively, which is in-line with government’s initial target of enrolling ten crore people till 31st May 2015. Out of these seven crore subscribers, maximum response is for PMSBY i.e. 5.19 crore, followed by PMJJBY (1.59 crore) and APY (70 thousand).

The schemes are being offered by all public sector general insurance companies – New India Assurance Company, National Insurance Company, The Oriental Insurance Co, and United India Insurance Co – through tie-ups with banks like SBI, HDFC, ICICI. The premium amount will be automatically debited from the bank accounts which are identified using Aadhaar card.

Through these schemes, Government aims to address two problems – first, to expand low coverage of accidental and life insurance in our country, and second, to minimize zero-balance account under Pradhan Mantri Jan Dhan Yojna. Initially, 97% of bank accounts under this scheme had zero balance, which has been brought down to 57%. By connecting these schemes with bank accounts, the government plans to bring zero-balance bank accounts to 0%.

According to industry experts, the scheme is a good option for those who do not have any kind of insurance cover. But for middle class, the cover is inadequate. Schemes providing higher insurance cover such as Rs. 50 lakhs for an annual premium of Rs. 6000 are more meaningful for them.

But taking a contrary view, aren’t social security schemes already present? Are these schemes initiatives of Modi government or repackaging of old schemes?

Aam Aadmi Beema Yojana (AABY) was established by central government in 2007, in which the insured person does not pay any premium. The premium is paid by central and state government for people living below poverty line. This is done only for head of the family or earning member of the family. Benefits include Rs. 30,000 cover in case of natural death, Rs. 75,000 in case of permanent total disability due to accident and Rs. 37,500 in case of temporary disability. Additional benefit in form of scholarships can also be availed for children.

Other schemes like Rajiv Gandhi Shilpi Swasthya Beema Yojana (RGSSBY) and the Rashtriya Swasthya Beema Yojana (RSBY) also extend benefits to craftsmen and people living BPL respectively. Difference between these schemes and the new ones are – first, insurance cover is more, and second, it is open to all and not to only families living BPL.

It can be said that these are improved versions of earlier schemes, extending benefits to more number of people. Involving more public and private organizations to promote the schemes instead of just LIC, is also a positive step. Now the wait is till 31st May 2015, before which maximum people have to be enrolled so that the scheme can start in full swing. Whether new or old, if these schemes provide benefits to those in need then, the project has achieved its purpose.



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