‘Swavalamban’ initiative to accelerate NPS yet to pick up

Despite government initiatives, the NPS has not generated enough interest among the masses. What needs to be done to prop up this excellent scheme?

Investors have not responded with much enthusiasm to the ‘Swavalamban’ initiative extended by the government under which it will contribute Rs1,000 per year (for a period of four years) to every New Pension Scheme (NPS) account opened this year with at least a matching contribution from the subscriber. Citizens in the non-government segment continue to abstain from investing in the NPS. The number of non-government subscribers to NPS registered as of 30 April 2010 has touched 5,532. Although the figure is more than double that of October 2009 when non-government subscribers were 2,321, the absolute numbers are still small.

The total central government employees registered under the NPS have gone up to 6,09,376 from 5,38,276 in October last year. However, there has been a large increase in numbers from among the state government employees during the same period. The number of subscribers under this category rose to 2,55,903 from the earlier 1,10,024.

An officer from one of the point of presence service providers (PoP-SP) pointed out that there have been no significant additions since the budget announcement. He said, “The momentum has not picked up much despite various initiatives from the government and banks. We have been told that this product should be bought and not sold. So we are not expected to advise customers in any way. The policy is that we wait for the customers to approach us. We are fully equipped and ready to accept subscriptions in the NPS.”

Incidentally, this PoP-SP has commissioned more than 300 of its branches to provide NPS registration facilities to the subscribers. Several other banks have also mobilised a chunk of personnel and designated a part of their infrastructure for catering to the NPS subscriptions. Another PoP service provider confirmed, “Although there is an improvement in the NPS accounts, it is not as much as what was expected.”

Commenting on what needs to be done to popularise the scheme, the official stated, “We need to approach private sector companies and talk to employees about the benefits of the scheme. The government could also probably offer a minimum dividend or guarantee as people may be worried about what they will end up with after so many years. Things will change if the scheme assures a minimum return.”

Speaking about the possible actions being considered to promote the scheme, an official from the Pension Regulatory and Development Authority (PFRDA) said, “The Swavalamban initiative has seen a slow and steady rise from the earlier rate of enrolment. The first phase of implementation is almost over. We are now looking at various promotional and monetary incentives for enrolment. We are considering media campaigns and strengthening the regulatory mechanism through monitoring the PoPs more closely and how to make them promote the scheme better.”

The still lukewarm response to the NPS is unfortunate considering that it is a product that is actually tailor-made for the requirements of the masses. It is among the least expensive balanced investment products in the market and the cheapest pension product in the offing, which would make a huge difference to long-term wealth.

Lack of confidence in the product is also a mitigating factor. Investors are wary about how much they will end up with after the contribution period. Investors should be advised by the PoPs regarding the portfolio allocation to debt and equity before investing. Awareness among the masses still remains a concern for the pension regulator and hence, its plans to promote the scheme need to take shape for the NPS to achieve its true potential.



Kodandapani Boga

3 years ago

please send me details for marketing for swavalamban plan


6 years ago

please tell me full detail of this scheme and contact nos.


6 years ago


P. Satyanarayana Reddy

7 years ago

NPS is bond to fail in current form.
first it have tax disadvantages and net it does have direct debt opt for payments. So people have to go to pop's every month to present their cheque in day of ATM and credit card..... This is like following old methods in new generation.


7 years ago

Agree with Mr Manoj.
An acquaintance visited the so called POPs for NPS - Axis Bank branches. However people at the Bank seemed 'unaware' of such a product. This was surprising after numerous articles in publications on various POP.
The obvious point here is that you may have communicated with the select TG about the product. But have failed to set up a robust distribution model.
Business is not equivalent to charity. Even a shopkeeper who sells soap gets a commission.....so why would someone take the trouble to sell or understand a complicated financial product for no remuneration?


7 years ago

let me know where can i approach to take the policy



In Reply to Somasundaramgurunathan 7 years ago

Check this link for all details:



7 years ago

If a particular movie is liked a person, he advises his family members, relatives, neighbours and friends to go and watch the movie! If there is a scheme being run by a particular theatre, for eg. buy one get one free, etc. I feel it is important to inform your friends that a special scheme is available at a particular time.
It is not always about benefitting from others, but also passing on benefits to your learned friends in the form of sincere advice, and then hoping that the outcome will be positive and good for all the investors.
The financial advisor (I have been known to advise friends for the last 27 years), has always been treated like a punk on the roadside, and howsoever qualified he/she may be, no guarantees are possible in any particular scenario.
The laloo investors, as they seem to call themselves, never manage to point a finger to people who created the biggest scams! Why? Simply because a laloo believes that, WHEN the Investment Dips it is the fault of the Advisor, and if it Grows, then surely it is the Laloo, who had invested wisely, and at the right time!
This debate has gone on for long and will continue, however I wish to believe that, May all Laloos investments rise and fall according to the nuances of the market forces, and the laloos profits and losses (only on paper), cause the laloos to skip a few heartbeats, now and then!!
After all doctors and lawyers, have to continue their business, whether you die or live, or you win or you lose!!!!!
Have a nice day!


7 years ago

Going by SEBI's logic & as per the general wisdom of many learned and erudite persons here on this forum, a plan which has zero entry load should have been a runaway success. Add to this fact an obscenely low fund management charges and you have a sure fire recipe for a product to become a super seller.

But reality is different. The average joe in the market does not understand the financial imlications of a long term investment product. I have come across a very large number of people who compare the returns of ULIP with that of a mutual fund and pass the judgement that ULIPs are bad, completely forgetting that ULIPs are meant to be products which they should hold on atleast till the time of retirement since it covers their life.

This, then is the reality. For any financial advisor, where is the incentive to advice this product to his clients? Or more pertinently, why should he? Neither the government pays him nor the client. And he is not running a charity to provide selfless service!!!


7 years ago

This is ''agent free'' scheme-so it is fully self served menu-
but i would caution-it is a TRAP-to grab peoples money-yor money would be locked till age of 58 years-
this scheme is just 50% DEBT and 50% bluechip equity-nothing special then this stuff-then i would recommend not to put yor money in some ones hands for so long period-better make yor 50% in any bank FD and 50% in NIFTY or SENSEX fund which are low cost-so go for this and you will have liquidity at hangs to meet emergencies-

Sunil Wadhwani

7 years ago

Can ANY resident individual of India (a tax payer) invest Rs. 1000/- per month in the Swavalamban scheme (i.e. New Pension Scheme) after 1-4-2010, and get the benefit of Rs. 1000/- per annum as contribution from the GOI.
If yes, does the investor pay Rs. 11000/- during the year or Rs. 12000/- and have the POPs been informed about the same??
On enquiry with certain POPs, they are unclear regarding the same, and one POP executive was completely shocked to hear about this. When I explained that the FM had announced this in the budget speech, the response was, "No commission is paid or received for this scheme!!"
Any one who can clarify???



In Reply to Sunil Wadhwani 7 years ago

Government will add Rs. 1,000 for 3 years, provided your investments are less than Rs. 12,000 per year in this scheme.



7 years ago

1. Pl let me know the details of the scheme.
2. How and where the acct. shd be opened.
3. Ny commission or brokerage for procuring agents



In Reply to KRSowmyanarayanan 7 years ago

Check this link for all details:


Roopsingh Solanki

7 years ago

I personally feel NPS is not going to catch up the way it has been launched-the govt wanted it to be low cost-so it elimineted IFA's from thios scheme-but what about the costs which govt is putting like yearly contribution-is this not a bad route in principals laid down for this scheme?at last it will be coming from tax payers pocket-some one will loose money for promotion of this scheme-
and the worst part is that any one can formulate its NPS planning by investing in any highly rated debt bonds or bank FD"s and rest in index fund which are low cost-in 50-50%,this portfolio will be liquid in nature then this NPS(non promoted / non performing schemes)
govt thinks its elf to be very clever-but some times very intelligent people are proved the biggest fools-and fools come out as the most wiser-

Steel prices may not come down

Steel prices are not likely to fall in the near future, as import rates for raw material are likely to rise

The Steel Authority of India (SAIL) has announced a price cut in long products. Are steel prices likely to fall in the coming weeks? SAIL’s price cuts are no indication of an overall fall in steel prices, as the cost of future raw material imports is likely to go up.

SAIL had announced a price cut of Rs2,000 per tonne for its long products effective from 1 May 2010. However, this is not an indication of any future fall in steel prices. Taking the current raw material import rates into account— which have risen—steel prices are not likely to soften.

The import price for steel products in stock is around $650 (or Rs32,000) per tonne. Reportedly, this inventory at the import price of $650 is already out of stock. According to research reports, the current market prices for flat products are around Rs36,000 per tonne.

While the stock at the import rate of $650 per tonne has already run out, the current import rates for these products have increased. Import prices are hovering around a minimum possible price of $720 per tonne for most types of steel products—other than ss400 grade coils between 4mm to 12mm thickness. Even the ss400 coils are trading at a minimum import price of $690.

Ergo, steel prices are not likely to fall further as import prices for raw material are on a rise. Any change in the current steel prices will not match the raw material equilibrium at current import rates.

Going forward, raw material imports after May are likely to fall. This might again lead to panic buying, similar to the activity witnessed in March.

An industry source said, “International prices in flat products are not softening, but remain steady in India, as there is an overhang of imported inventory at low dollar prices held by small traders, which they are clearing in a panic. Raw material inventories are already subsiding.”


UN report pegs GDP growth at 8.3% in FY11

The growth outlook is higher than the RBI’s projection of 8% but at the lower end of the finance ministry's forecast of 8.25%-8.75%

The economy is likely to grow by 8.3% in the current fiscal, as against an estimated 7.2% in 2009-10, riding on revival in industrial growth and private consumption, says a report by a UN body, reports PTI.

The report titled ‘The economic and social survey of Asia and the Pacific 2010’ and released by the UN Economic and Social Commission for Asia and the Pacific (Escap) today, said that food inflation, high deficit and large portfolio capital inflows are matters of concern, but still it suggested governments in the Asia-Pacific region to hike social spending to turn the fledgling rebound into sustainable recovery.

“With a revival in investment and private consumption, growth in exports and a strong expansion in industrial production in the recent months, GDP growth is projected to accelerate to 8.3% in 2010,” the report said.

The growth outlook is higher than the RBI’s projection of 8% but at the lower end of the finance ministry's forecast of 8.25%-8.75%.

The Escap report said that in the Asia-Pacific region, developing economies would grow by 7% in 2010-11, led by China and India growing at 9.5% and 8.3%, respectively.

“Governments must embrace this opportunity to secure the gains of the economic rebound by investing in social programmes that directly benefit those hit hardest by (the) still-lingering global crisis,” the report said.

While saying that surging food prices is a cause of concern for India, the report said retail price inflation will fall to 7.5% in 2010 from 12% last year. Consumer prices in India, particularly of food, have "remained stubbornly high", it noted. The consumer price index (for industrial workers) rose to about 9% in 2008 and further climbed to 12% in 2009, it said. "A faster increase in food prices has become a cause of concern," the agency said in the report.

The report expressed concern over high deficits in some South Asian countries where governments used expansionary policies to counter the impact of the global slowdown. "It is important that governments in the sub-region prepare a clear roadmap for fiscal consolidation to be implemented at the earliest to contain growing public debt,” it said.

The survey added, "Yet another challenge is to manage portfolio capital inflows, mainly by FIIs that are leading to build-up of bubbles in capital markets and putting upward pressure on the exchange rates.”

It took note of the BSE index appreciating by over 100% between during March-December 2009 as FII inflows returned to the capital markets and the rupee rallying by around 6% in 2009.


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