What is the Swavalamban Scheme?
The Swavalamban Scheme is a sub-scheme under the NPS Scheme which we covered in great detail in our blog. This scheme is applicable to all citizens of India who are in the unorganized sector & meet the eligibility criteria, who join the NPS in the year 2010-2011. Under this scheme, the Central Government will contribute Rs. 1000 per year to each NPS account opened in the year 2010-2011 and for the next 3 years 2011-12, 2012-13 and 2013-14. To benefit the citizens who opened their accounts in 2009-10, the government has declared that, they will also be entitled to the benefit of the Swavalamban scheme, that is if they meet the eligibility criteria.
What is the Eligibility Criteria?
There are two important criteria:
1. The citizen must belong to the unorganized Sector and
2. The citizen must make a minimum contribution of Rs. 1000 and a maximum contribution of Rs. 12000 per annum for both the Tier 1 and Tier 2 accounts taken together.
Though the second eligibility criterion is very simple, the 1st one is a bit confusing, isn’t it?
What is the Unorganized Sector?
For the purpose of this scheme, a person will be considered as belonging to the unorganised sector if that person:
1. Is not in regular employment of the Central or a state government, or an autonomous body/ public sector undertaking of the Central or state government having employer assisted retirement benefit scheme, or
2. Is not covered by a social security scheme under any of the following laws:
a. Employees’ Provident Fund and miscellaneous Provisions Act, 1952
b. The Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948
c. The Seamen’s Provident Fund Act, 1966
d. The Assam Tea Plantations Provident Fund and Pension Fund Scheme Act, 1955
e. The Jammu and Kashmir Employees’ Provident Fund Act, 1961
So, if you meet the above 2 criteria and are eligible, you can get Rs. 1000/- for 3 years, which is Rs. 3000/- in all as an extra motivation to invest in this scheme.
Who gives this extra money?
Of course, the Government of India gives …
Why is the Government doing this?
Since this scheme is aimed at being a retirement corpus for the citizens of India, the government has to motivate the people to join it and what better motivation than giving some extra money to the common investor?
What if someone doesn’t meet the eligibility criteria but still applies for it?
If someone doesn’t qualify for this benefit but still claims falsely that he/she is eligible and applies for this scheme, the government reserves the right to reclaim the money credited to their account along with interest & any penalties for providing false information.
Hope this covers enough info about the Swavalamban Scheme. If you need any other info, you know what needs to be done…
Just leave a comment and I will see what I can do.