Dated 21.06.2025 : India has a multi-pronged approach to social security for its senior citizens, though it differs significantly from the US Social Security system in its structure and coverage. While the US system is a broad, contributory social insurance program, India’s system is a mix of:
NON-CONTRIBUTORY SOCIAL SECURITY SYSTEM AND CONTRIBUTORY SYSTEM
- Non-contributory Social Assistance Schemes (primarily for the poor):
- National Social Assistance Programme (NSAP): This is a flagship, centrally sponsored scheme by the Ministry of Rural Development. It includes several sub-schemes that provide financial assistance, mainly to those below the poverty line
Indira Gandhi National Old Age Pension Scheme (IGNOAPS): Provides a monthly pension to individuals aged 60 and above who are identified as Below Poverty Line (BPL). The amount varies based on age (e.g., higher for those 80 and above) and is supplemented by state governments.
Annapurna Scheme: Aims to provide food security by offering 10 kg of free rice every month to senior citizens who are eligible for IGNOAPS but have not been covered under it.
Other NSAP components: Indira Gandhi National Widow Pension Scheme (IGNWPS) and Indira Gandhi National Disability Pension Scheme (IGNDPS) also provide support to specific vulnerable groups, some of whom may be senior citizens
2. Contributory Pension and Provident Fund Schemes (primarily for the organized sector):
- Employees’ Provident Fund (EPF) and Employee Pension Scheme (EPS): These are mandatory savings and pension schemes for most salaried employees in the organized sector. Both employees and employers contribute a portion of the salary. EPF provides a lump sum on retirement, while EPS offers a monthly pension based on years of service.
- National Pension System (NPS): A voluntary, contributory pension scheme open to all Indian citizens. It’s a market-linked scheme where individuals contribute regularly during their working lives, and upon retirement, they can withdraw a portion as a lump sum and use the rest to purchase an annuity for a regular pension. It’s becoming increasingly popular for both organized and unorganized sector workers.
- Atal Pension Yojana (APY): Specifically designed for workers in the unorganized sector. It’s a voluntary, contributory scheme where individuals receive a guaranteed minimum monthly pension after the age of 60, depending on their contributions. The government also co-contributes for eligible subscribers.
- Pradhan Mantri Shram Yogi Maan-Dhan Yojana (PM-SYM): Another voluntary and contributory pension scheme for unorganized sector workers, providing an assured monthly pension of ₹3,000 after attaining 60 years of age.
Savings and Investment Schemes (for senior citizens to manage their savings):
- Senior Citizens’ Savings Scheme (SCSS): A government-backed, risk-free investment scheme offering attractive interest rates for individuals aged 60 and above. It provides regular interest income.
- Pradhan Mantri Vaya Vandana Yojana (PMVVY): A pension scheme managed by the Life Insurance Corporation (LIC) of India, offering an assured return for senior citizens on a lump sum investment.
- Now the scheme is not available for fresh subscriptions .
Post Office Monthly Income Scheme (POMIS): A low-risk scheme that provides regular monthly income.
- Healthcare and Welfare Schemes:
- Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY): A national health protection scheme that provides health coverage, including for many senior citizens, for secondary and tertiary care hospitalization. Recently, the government expanded this to cover all senior citizens aged 70 and above, regardless of income.
- Rashtriya Vayoshri Yojana (RVY): Provides physical aids and assisted-living devices (like walking sticks, wheelchairs, hearing aids) free of cost to senior citizens belonging to the BPL category or with low income, who suffer from age-related disabilities.
- Integrated Programme for Senior Citizens (IPSrC): Provides grants to NGOs for running and maintaining old age homes, continuous care homes, mobile medicare units, etc., for indigent senior citizens.
Key Differences from US Social Security:
- Universal vs. Targeted: The US Social Security system is universal for most workers, while India’s system is more fragmented. Many schemes are targeted at specific income groups (BPL), specific sectors (organized vs. unorganized), or are voluntary savings schemes.
- Funding: While the EPF/EPS and NPS are contributory, much of the direct pension support for the poorest elderly in India comes from general government revenues rather than a dedicated payroll tax system like FICA.
- Benefit Levels: The benefit levels under many Indian government pension schemes for the poor are relatively modest, primarily aimed at providing basic subsistence, unlike the US system which aims to replace a more significant portion of pre-retirement income.
- Coverage Gaps: Despite significant efforts, there are still considerable coverage gaps, especially for workers in the vast informal sector who may not be covered by EPF/EPS or may not voluntarily enroll in schemes like APY.
In essence, India is building a social security framework for its aging population, with a focus on both welfare for the vulnerable and encouraging contributory savings for others. However, it’s a work in progress with ongoing challenges in terms of coverage, adequacy of benefits, and financial sustainability.
READ OUR ARTICLE “ SOCIAL SECURITY SYSTEM OF THE USA “
Note : The information in the article is based on answers we got from AI apps and has been edited by us .