Nirmala Sitharaman Launches NPS Vatsalya: A Pioneering Pension Scheme for Minors

During her keynote address, Smt. Sitharaman emphasized that NPS Vatsalya aligns with Prime Minister Narendra Modi’s vision of a developed India by 2047.

Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, officially launched the National Pension System Vatsalya (NPS Vatsalya), a pioneering pension scheme designed for minors, in New Delhi today. This initiative was initially announced in the Union Budget 2024-25 on July 23, 2024.

Accompanying Smt. Sitharaman at the launch were Union Minister of State for Finance, Shri Pankaj Chaudhary; Shri Nagaraju Maddirala, Secretary of the Department of Financial Services (DFS); and Shri Deepak Mohanty, Chairman of the Pension Fund Regulatory Authority of India (PFRDA). The event was attended by school children, their parents, and other esteemed guests, with simultaneous launches taking place at 75 locations across the country, where over 250 Permanent Retirement Account Numbers (PRAN) were distributed to minor subscribers.

During her keynote address, Smt. Sitharaman emphasized that NPS Vatsalya aligns with Prime Minister Narendra Modi’s vision of a developed India by 2047. She described the scheme as a crucial step in promoting long-term financial planning and security for all citizens. The initiative aims to foster a culture of savings among young subscribers, enabling them to accumulate wealth through the power of compounding.

Smt. Sitharaman praised the success of the Atal Pension Yojana, noting that since its launch in 2015, it has attracted 6.90 crore subscribers and accumulated a corpus of ₹35,149 crore. Highlighting the competitive returns of the NPS, she stated that the government sector has seen an average Compound Annual Growth Rate (CAGR) of 9.5% since the scheme's inception.

Union Minister of State for Finance, Shri Pankaj Chaudhary, remarked that NPS Vatsalya represents a significant stride towards inclusive economic development and urged all institutions involved to ensure maximum coverage of the scheme.

Shri Nagaraju Maddirala emphasized the need for a collaborative approach among stakeholders, including banks, to ensure effective implementation and outreach of the NPS scheme. He highlighted ongoing efforts to include more informal sector workers in the pension system and stressed the importance of financial education campaigns to raise awareness about retirement planning.

Dr. Deepak Mohanty, Chairperson of PFRDA, noted that the government's forward-thinking strategy aims to provide social security for all, allowing young subscribers to harness the benefits of compound interest for substantial wealth accumulation.

Eligibility for NPS Vatsalya includes:

All minor citizens under 18 years of age.

Accounts can be opened in the minor's name and operated by a parent or guardian.

A minimum annual contribution of ₹1,000 is required, with no maximum limit.

Multiple investment options will be available, including government securities, corporate debt, and equity.

Upon reaching adulthood, the account can seamlessly convert into a standard NPS account.

The launch of NPS Vatsalya marks a transformative step towards securing the financial futures of India’s younger generations, encouraging early savings and investment practices.