6 days ago
CEA Urges Indians to Prioritize Long-Term Pension Savings
V Anantha Nageswaran says people should save for retirement over many years instead of focusing mainly on quick trades.
Pension savings may feel less exciting, but they can help people have money when they stop working.
India’s pension savings are much smaller compared with the size of its economy than those in some other countries.
More households have been investing in shares and mutual funds, but pension and insurance savings have not grown as a share of household savings in recent years.
Nageswaran says people need trustworthy institutions, clear information and easy-to-use products to save for longer.
The pension regulator is working on plans that could provide retirees with steady income for life and account for inflation.
Sanjay Lohiya reminded pension fund managers that they are responsible for people’s retirement savings.
He also said pension funds could eventually provide long-term money for infrastructure projects.
Chief Economic Adviser V Anantha Nageswaran urged Indians to move from short-term trading toward long-term savings, including pension investments.
The National Pension System had a corpus of about ₹18 lakh crore as of September, with 47% in government securities, 28% in equity and 21% in corporate debt.
Equity and mutual funds’ share of annual household savings rose from about 2% in FY12 to around 15% in FY25, while bank deposits’ share fell from over 58% to about 35%.
India’s pension assets were about 17% of GDP, compared with at least 80% in OECD peer countries; pension and insurance assets’ share of household savings was unchanged between FY19 and FY24.
Nageswaran said the Pension Fund Regulatory and Development Authority was working on retirement income schemes with assured payouts, while Financial Services Secretary Sanjay Lohiya urged careful management of pension funds.
- Who
- Chief Economic Adviser V Anantha Nageswaran and Financial Services Secretary Sanjay Lohiya.
- What
- They called for stronger long-term pension saving and responsible management of pension funds.
- Where
- Delhi; Nageswaran spoke virtually.
- When
- At an NPS Diwas event; the article does not specify the event date.
- Why
- To strengthen financial security in retirement and build trust in pension saving.
Key facts
- NPS corpus
- About ₹18 lakh crore as of September.
- NPS asset allocation
- About 47% in government securities, 28% in equity and 21% in corporate debt.
- India pension assets
- About 17% of GDP, according to Nageswaran.
- OECD peer pension assets
- At least 80% of GDP, according to Nageswaran.
- Household savings shift
- Equity and mutual funds rose from about 2% of annual household savings in FY12 to around 15% in FY25; bank deposits fell from over 58% to about 35%.
- SIP flows
- Monthly systematic investment plan flows rose from under ₹4,000 crore in FY17 to over ₹28,000 crore in the first eight months of FY26.
- Retirement income schemes
- The PFRDA is working on schemes with assured payouts for people over 60, intended to provide lifetime income that keeps pace with inflation.
Quotes
V Anantha Nageswaran
India’s Chief Economic Adviser
“The Indian saver has shown a willingness to accept market risk or so we would like to believe. What the saver has not yet done at scale is to commit savings for a longer tenure.”
livemint.com
“It's one thing to manage a debt fund or a mutual fund and another thing to manage a pension fund.”
livemint.com
Sources
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