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Mahatma Gandhi Pravasi Surksha Yojna (MGPSY)

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Mahatma Gandhi Pravasi Surksha Yojna (MGPSY)[1] is a scheme launched by Ministry of Overseas Indian Affairs (MOIA) for providing social security[2] in the form (a) pension, (b) savings for return and resettlement and (c) life insurance to unskilled / semi-skilled overseas Indian workers (with below matriculation education).

The Scheme commenced on a pilot basis in Kerala on 1st May 2012,for overseas workers in 17 Emigrant Check Required (ECR) countries[3] -ie., those countries where social security needs of foreign workers are less /not addressed.The Scheme is named after the father of nation – Mahatma Gandhi.

This Scheme combines the three existing voluntary savings schemes functioning under the jurisdiction of three financial sector regulators –Pension Fund Regulatory Development Authority(PFRDA),Securities and Exchange Board of India (SEBI) and Insurance Regulatory Development Authority (IRDA).

In detail, MGPSY provides for:

  1. Pension from the age of 60 through investment in a PFRDA regulated pension scheme - NPS Lite; Withdrawal in NPS Lite is not permitted before attaining the age of 60 years, subject tothe exit policy of PFRDA.
  2. Savings for return & resettlement (R&R) through investment in the UTI Monthly Income Scheme (MIS) run by the SEBI regulated mutual fund Unit Trust of India(UTI);Subscriber can withdraw this amount on return to India or can remain invested;
  3. Freelife insurance cover against natural /accidental death and disability during the period of coverage under JanashreeBimaYojana (JBY) run by the IRDA regulated insurance firm - Life Insurance Corporation of India(LIC).

Government of India, from the budget of Ministry of Overseas Indian Affairs contributes to the Scheme in the following manner:-

  1. Government contributes Rs.1,000 per annum for male MGPSY beneficiary and 2000 per annum for female MGPSYbeneficiary,if they save between Rs.1,000 and Rs.12,000 per year in NPS-Lite.
  2. Government contributes Rs.900 towards Return and Resettlement (R&R) of the overseas Indian workers (whether male or female)if they save Rs.4,000 or more per annum in R&R Scheme of UTI-AMC.
  3. A free contribution of Rs. 100 is made by the Government for providing insurance coverage to all MGPSY beneficiaries.
  4. Government will co- contribute for a period of five financial years or till the worker return to India, whichever is earlier.

MGPSY is a voluntary scheme with subscriber joining this scheme on his/her own discretion. MGPSY offers all the three Partner schemes in the form of a package and not in isolation. That is, subscribers have to opt in all three partner schemes if he wishes to subscribe in MGPSY and registration in MGPSY will stand cancelled if subscriber fails to get registered in any of the three sub schemes.

Minimum contribution under R&R scheme is Rs 1000 and in NPS lite, it is Rs 100. (i.e, an MGPSY beneficiary has to pay a minimum of Rs. 1100 at the time of enrollment) However, government’s co-contribution occurs only if the beneficiaries save per annum, Rs. 1000or more for NPS-Lite and Rs. 4000 or more for R&R Scheme.

If the worker fails to contribute at any point of time later-on, the savings accumulated in subscriber’s MGPSY account will remain secure and will remain invested in NPS-Lite and UTI-MIS in his/her own name. There is no penalty by MOIA in the event of no contribution from subscriber. However, subscriber will not get any kind of co-contributory benefit from MOIA if s/he does not contribute but will still be covered under Insurance.

Investments under the NPS Lite is managed by PFRDA regulated fund managers while Investment under R&R will be managed by SEBI regulated UTI -AMC. Investments under MGPSY are made primarily in government securities and bonds; Investment ratio in both R&R scheme and NPS Lite is 85:15 where 85 % is in Government securities and corporate bonds and 15 % in Equity. In a way, MGPSY is similar to a “debt scheme”. The returns under the scheme are market driven, hence, the rate of return is neither fixed nor guaranteed.

Subscribers’ pension and resettlement amount will depend on (1) how much they have saved, (2) and the returns that NPS-Lite and UTI earns for their savings and the (3) co-contribution benefits from the Government.

MGPSY is marketed and serviced through various Service Providers / aggregators[4] operating under PFRDA. In areas where aggregators / service providers don’t have presence, they operate through agents / facilitators. At present, mutual fund distributors are not service providers under MGPSY. A Public Sector Bank namely, Bank of Baroda, has been appointed as the Service Provider and Banking Partner for MGPSY.

The Scheme was initially called Pension and Life Insurance Fund (PLIF) and MOIA had issued an FAQ also.


International Experience

Such social security measures for non-resident workers, not covered under social security scheme of host country or where there is no access to basic safety net while working abroad, are given by other countries also, though the manner of providing for social security may differ. Examples include Philippines, France, Tunisia etc.


Relevant Information

Subscribers’ information pertaining to MGPSY may be seen here.

Information for service providers may be seen here.

See the annual reports of MOIA to see the number of migrant labourers from India- destination wise.


1) Pravasi refers to Non-resident; Suraksha refers to security; Yojna refers to Scheme / Plan

2) The term of social security can be described as follows:”… the protection which society provides for its members, through a series of public measures, against the economic and social distress that otherwise would be caused by the stoppage or substantial reduction of earnings resulting from sickness, maternity, employment injury, unemployment, invalidity, old age and death; the provision of medical care; and the provision of subsidies for families with children…” (ILO, 1984, p.3). This definition corresponds to the nine classical branches of social security laid down in the ILO Social Security (Minimum Standards) Convention, 1952 (No.102):
1.Medical care
2.Sickness benefit
3.Unemployment benefit
4.Old-age benefit
5.Employment injury benefit
6.Family benefit
7.Maternity benefit
8.Invalidity benefit and
9.Survivors’ benefit.

3) Emigration Act, 1983 provides that no citizen of India shall migrate unless he obtains emigration clearance from Protector of Emigrants. Similarly, it has been recognized that certain countries (currently 17) do not have strict laws regulating the entry and employment of foreign nationals. They also do not provide avenues for grievance redressal. Thus they have been categorized as Emigration Check Required (ECR) countries. Hence, all persons, having ECR endorsed passports and going to any of the 17 ECR countries for taking up employment require emigration clearance. However, ECR passport holders going to any ECR country for purposes other than employment do not require emigration clearance.

4) Aggregators are intermediaries identified and approved by PFRDA, to perform subscriber interface functions under their pension Scheme -NPS-Lite. Aggregator shall perform the functions relating to registration of subscribers, undertaking Know Your Customer (KYC) verification, receiving contributions and instructions from subscribers and transmission of the same to designated NPS Lite intermediaries


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