Nirmala Sitharaman Retorts to Jairam Ramesh’s ‘Atal Pension Yojana Poorly Designed’ Remark

Union Finance Minister Niramala Sitharaman, while hitting out at the Congress leader, stated that the Congress prefers that the poor should not have pensions so that they are forced to rely on government hand-outs which keeps them dependent on dynasty politicians.

Responding to the Jairam Ramesh statement, Sitharaman said, “On Atal Pension Yojana, Jairam Ramesh, who is known for using verbal sophistry to hide facts, is being malicious or is ignorant of the basic tenets of designing a good pension scheme.”

Jairam Ramesh alleged that nearly 83 per cent of subscribers are in lowest slab of Rs 1000 pensions

Earlier, hitting out at the central government, the general secretary of the Congress had stated, “The ‘flagship’ Atal Pension Yojana is a very poorly-designed scheme, a paper tiger that needs officials to hoodwink and coerce people into participating in it. It’s a fitting representation of the Modi Government’s policymaking: headline management, with few benefits actually reaching the people!”

Pointing out at a few lapses, Jairam Ramesh further said, “The Finance Minister was in Bengaluru on the 24th of March, where she was proclaiming the benefits of the Atal Pension Yojana initiated by the Modi Government as its ‘flagship social security program’. Just a day later, here’s what emerged: Up to a third of the subscribers to this scheme were enrolled into the scheme without ‘explicit permission’, by officers seeking to meet their quotas. Nearly 83% of the subscribers are in the lowest slab of Rs. 1,000 pensions, because the monthly contribution for it is low and it goes ‘unnoticed’ by the beneficiaries. For subscribers, the amount of return is not very attractive since it is a fixed income pension, which loses value with rising prices.”

Jairam Ramesh known for using verbal sophistry to hide facts: Sitharaman

Lashing out at the Congress’ criticism of the Atal Pension Yojana, Nirmala Sitharaman took to X, saying, “On the Atal Pension Yojana, Jairam Ramesh known for using verbal sophistry to hide facts, is being malicious or is ignorant of the basic tenets of designing a good pension scheme.”

She further said that the Atal Pension Yojana is designed based on best practice choice architecture to automatically continue the premium payment unless the subscriber opts out.

“This is a deliberate and beneficial feature which is in the best interest of the subscribers. Instead of requiring people to decide each year to continue, they have to make a decision to discontinue. This makes many of them take the right decision and save for their retirement,” she posted on X.

“Richard Thaler (Nobel prize winner in Economics 2017) and Cass Sunstein (a Professor who worked in the Obama administration) are known for their book ‘Nudge’ which explains the need for proper ‘choice architecture’ in designing public schemes,” she said.

“Jairam Ramesh calls it a fixed income pension. He has not bothered to check facts. The minimum return under the APY is guaranteed by the GoI to be at least 8 per cent, regardless of prevailing interest rates and returns. This is an attractive guaranteed minimum return. GoI (Government of India) pays a subsidy to PFRDA to make up for any shortfall in actual returns. If higher investment returns are received on the contributions of subscribers of APY, higher pension would be paid to the subscribers: In fact, currently the returns are more than 8 per cent,” she added.

“Jairam Ramesh says that people are being ‘hoodwinked and coerced’ into participating! Hoodwinking is what Indian National Congress does always — in the name of vote bank politics or minority appeasement. Coercion is what was used to make former Chairman of SBI Shri RK Talwar resign because he refused to give loans to favourites of the dynasty,” she said.

The Finance Minister said that as regards the majority of pension accounts being in the lower slabs, for a subsidised scheme intended for the poor and lower middle class, this is obvious.

“In fact, it shows the proper targeting of the scheme. If the offtake was at the higher end, that would be surprising! The elitist mindset of the dynasty and its minions who are constantly thinking of people in the higher echelons of society, perhaps, blinds them to this obvious truth. The Congress prefers that the poor should not have pensions so that they are forced to rely on government hand-outs which keeps them dependent on dynasty politicians,” she added.

Union Finance Minister Nirmala Sitharaman had earlier hailed the Centre’s Atal Pension Yojana is the government’s flagship social security programme launched 8 years ago, and said that a total of 5.26 lakh people have benefited from the scheme only in Bengaluru.