Social Protection Brief: Supporting Pension Reforms in India
Sri Wening Handayani; Michelle Domingo-Palacpac | February 2015
Abstract
The Government of India is at the forefront of pension reform in South Asia. The drive for pension
reform stemmed from ballooning unfunded pension liabilities under the defined benefit system for
civil servants, which was not fiscally sustainable for both central and state governments. The current
occupational pension system for civil servants and salaried employees in the private sector barely
covers 14% of India’s paid workforce. Most of India’s workforce is employed in the informal sector,
and are excluded from the benefits of a regulated retirement income system.
In 2004, the government took the first steps toward establishing a self-sustaining and broad-based
pension system for India when it moved away from unfunded defined benefit pensions for government
employees in favor of a contributory system. This new system is a defined-contribution, individual-
accounts-based pension program mandatory for civil servants. In 2009, the NPS was made available
to all other Indian citizens, including informal sector workers, on a voluntary basis
Citation
Sri Wening Handayani; Michelle Domingo-Palacpac. 2015. Social Protection Brief: Supporting Pension Reforms in India. © Asian Development Bank. http://hdl.handle.net/11540/3306. License: CC BY 3.0 IGO.PDF ISBN
978-92-9254-874-2
Print ISBN
978-92-9254-873-5
ISSN
2071-7202 (Print)
Citable URI
http://hdl.handle.net/11540/3306Metadata
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