Government Considers Proposal for Mandatory NPS for Gig Workers

The Government is reportedly considering a proposal to extend the National Pension System (NPS) to gig workers and other sections of the unorganised workforce.  

As per news reports, this helps expand pension coverage across India. Discussions are ongoing on whether enrolment for gig workers should be kept voluntary or made mandatory. 

Focus on Under-Served Segments 

The proposal is aimed at workers who remain outside formal retirement systems. These include gig workers, employees of micro and small businesses, women, and workers in rural areas. Pension penetration in these groups is still limited, which has prompted the review. 

Inter-departmental consultations are in progress, and coordination between central ministries and state governments is expected if the proposal moves ahead. 

Atal Pension Yojana in Review 

At the same time, the government is looking at ways to improve the reach of the Atal Pension Yojana (APY).  

The scheme currently has around 86 million subscribers. However, official data shows persistence levels at about 50%, indicating that many subscribers discontinue contributions. 

Authorities are considering higher pension options and incentives for low-income groups to improve enrolment and continuity. Expanding outreach through pension sakhis, working with business correspondents, is also being discussed, especially in semi-urban and rural areas. 

Employer Role and Auto-Enrolment 

Among the suggestions under discussion is a proposal to ask private sector establishments to enable NPS for their employees.  

Another idea involves auto-enrolment, where workers would be added to the system by default unless they choose to opt out. The measure is to improve coverage, particularly in smaller firms. 

The role of states, with contributory pension schemes expected to see wider participation, while state-run programmes may function as supplementary support. 

Digital Onboarding Proposal 

A proposal to allow one-click opening of NPS accounts for UPI users is also being examined. This is for simplifying account creation and improving access for gig and informal workers. 

Read More: PFRDA Aims to Boost NPS Returns via Higher Equity Exposure and New Asset Classes! 

Conclusion 

The proposal is still at the discussion stage, with officials weighing whether pension coverage for gig workers should be voluntary or mandatory. A final decision is yet to be taken. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.   
 
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.