Union Budget 2024-25: 'Vatsalya' Pension Scheme for Minors Proposed

Union Finance Minister Nirmala Sitharaman has proposed a new contributory pension scheme for minors, 'Vatsalya,' as part of the Union Budget 2024-25. The initiative allows contributions by parents and guardians, and can be converted into a regular National Pension System account upon reaching adulthood.

Union Finance Minister Nirmala Sitharaman has unveiled a new pension scheme for minors, named 'Vatsalya,' in the Union Budget 2024-25 presented in Parliament. The scheme is contributory, with parents and guardians making contributions. Upon attaining the age of majority, the account can seamlessly transition into a regular National Pension System (NPS) account.

The Minister further informed that significant advancements have been made by the committee tasked with reviewing the National Pension System (NPS). Expressing satisfaction with the progress, she noted the constructive approach taken by the National Council of the Joint Consultative Machinery for Central Government Employees' Staff Side. She assured that a solution addressing relevant issues while maintaining fiscal prudence would be devised to protect the interests of common citizens.

Last year, the Finance Ministry initiated the formation of a committee to evaluate the pension scheme for government employees and consider necessary changes within the current framework. Under the old pension scheme, government employees received a monthly pension post-retirement. The new pension scheme, effective since April 1, 2004, requires employees to contribute a portion of their salaries to the pension fund, replacing the old scheme discontinued in December 2003 (ANI).