In a strong rebuttal to Congress charges, Finance Minister Nirmala Sitharaman on Tuesday said Atal Pension Yojana (APY) is designed based on the best practice choice architecture and guarantees a minimum of 8 per cent return.

“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,” Sitharaman said in a post on X.

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Instead of requiring people to decide each year to continue, they have to take a decision to discontinue, she said, adding, this makes many of them take the right decision and save for their retirement. She said that there is no coercion or force at all for their contribution debit.

“Under APY, Direct Debit is only allowed with consent of the subscriber. At the time of application, a subscriber gives express & explicit authorization indicating contribution amount, frequency of contribution and auto-debit from his/her bank account,” she said in another post on X.

If a subscriber wishes to exit the scheme, he/she is permitted to exit the scheme and the entire pension wealth is returned, she said. Therefore, the assertion that enrolment is non-consensual, based on cherry-picked data, is wrong, she added.

Earlier in the day, the Congress attacked the Prime Minister Narendra Modi-led government over the Atal Pension Yojana, alleging it is a “very poorly-designed scheme” and a “paper tiger” that needs officials to hoodwink and coerce people into participating in it.

Congress general secretary Jairam Ramesh said the scheme is a “fitting representation of the Modi government’s policy making: headline management, with few benefits actually reaching the people”.

His attack came after a media report claimed that at least one of three subscribers who dropped out of the central government’s pension scheme for the unorganised sector, the Atal Pension Yojana (APY), did so because their accounts were opened without their “explicit” permission. The report cited a recent sample study by the Indian Council of Social Science Research (ICSSR).

Attacking Ramesh, Sitharaman said he did not bother to check facts on the guaranteed pension scheme.

“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 pays a subsidy to PFRDA to make up for any shortfall in actual returns,” she said.

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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 said.

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

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, she said.

In fact, it shows the proper targeting of the scheme, she said, adding, 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 @INCIndia prefers that poor should not have pensions so that they are forced to rely on government hand-outs which keep them dependent on dynasty politicians, the minister said.