India’s pension fund regulator has recommended that the federal government introduce a UK pension scheme for the country’s gig workers, a measure aimed at bringing about 90 percent of its total workforce into retirement, the chairman told Reuters .
The Pension Fund Regulatory and Development Authority (PFRDA), which manages more than $102 billion in assets, has proposed that workers at food and taxi aggregators be automatically enrolled in the National Pension Scheme (NPS), Chairman Supratim Bandyopadhyay said on Tuesday. an interview.
The PFRDA regulates the NPS, India’s voluntary retirement savings scheme which started in 2004 and now has 16.7 million subscribers, representing both the government and the private sector and parts of the unorganized sector.
The PFRDA has recommended that employers withhold a portion of their payouts to gig workers and contribute to the NPS scheme, Bandyopadhyay said.
India’s informal or unorganized sector employs about 90% of the country’s workforce, leaving them without social security benefits.
The number of gig workers, much of which are delivery and sales personnel, is expected to reach 9.9 million in 2022-23, an increase of about 45% from 2019-20, according to a report by think tank NITI Aayog that was released in June.
The PFRDA’s recommendation to retire these workers replicates the UK pension scheme which requires every employer, even those with only one employee, to enroll their staff in and contribute to a pension scheme.
Currently, Indian law mandates that only companies with more than 20 employees must enroll in the Employee Provident Fund program, which requires contributions from both the employer and employees.
“This leaves a huge, untapped area of the unorganized sector that is not covered by any pension scheme,” said Bandyopadhyay.
To make the NPS scheme attractive, the regulator has also proposed to the government to double the annual tax exemption for subscribers to 100,000 rupees ($1,208), he said.
Going green
India plans to raise 160 billion rupees ($1.93 billion) this fiscal year through its first ever government green bond issuance.
The PFRDA and its ten pension fund managers are eager to invest in these green bonds, Bandyopadhyay said.
“I think you’ll see when the guidelines come out, a lot of fund managers will fight for this (green bonds),” he said.
“As a long-term investor, we can’t look away and say, ‘No, others will.’ Our fund managers have also agreed to this.”
($1 = 82.7780 Indian Rupees)
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