Finance
Union Finance Minister Nirmala Sitharaman will launch the NPS-Vatsalya program on September 18 in Delhi, according to sources.
Deepak Mohanty, Chairman of the Pension Fund Regulatory and Development Authority (PFRDA), Pankaj Choudhary, Minister of State (MOS) for Finance, senior finance ministry officials, and Nagaraju Maddirala, Secretary of the Department of Financial Services, will also attend the event.
“NPS-Vatsalya, a plan for contributions by parents and guardians for minors, will be introduced. Upon reaching the age of majority, the plan can be seamlessly converted into a regular NPS account,” FM Sitharaman had said during her budget speech in July.
The NPS-Vatsalya scheme is specifically designed for young people. This unique concept allows parents and guardians to open accounts for their minor children and contribute to their retirement savings.
Flexibility is a crucial component of the scheme. When the kid turns 18, parents can convert the account into a conventional NPS account, ensuring a smooth transition into long-term retirement planning.
“FM Sitharaman will also launch the NPS-Vatsalya scheme at remote locations via video conference,” said the source.
All parents and guardians, including Indian citizens, NRIs, and OCIs, can open an NPS-Vatsalya account for their young children.
One important aspect of the system is that parents can begin saving for their child’s retirement as early as infancy. The power of compounding can greatly increase returns over a long investment horizon. Furthermore, once the child reaches age, their account will immediately be converted into a regular NPS account. Parents can contribute ₹500 per month or ₹6,000 annually.
“The Committee reviewing the NPS has made significant progress in its work. I am glad that the Staff Side of the National Council of the Joint Consultative Machinery for Central Government Employees has adopted a constructive stance. A solution will be developed that addresses relevant issues while maintaining fiscal prudence to protect the common citizen,” FM Sitharaman had said during her budget speech.
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