National Pension Scheme (NPS) for Traders and Self-Employed Persons

The National Pension Scheme for Traders and Self-Employed Persons Yojana, earlier proposed as Pradhan Mantri Laghu Vyapari Maan-dhan Scheme, came into effect in 2019. It is a social security scheme introduced by the Indian government to offer pension benefits to traders and self-employed individuals from the unorganized sector. This scheme aims to provide a minimum assured pension of ₹3,000 per month after reaching the age of 60, with the entry age group being 18-40 years.

 

Similar to the National Pension System (NPS) for individuals, this is a voluntary and contribution-based scheme, implemented by the Ministry of Labour and Employment. This scheme has benefitted over three crore traders and self-employed persons in the country. These individuals aren’t covered by NPS, Employees’ State Insurance Corporation (ESIC), and Employees’ Provident Fund Organisation (EPFO).

 

The National Pension Scheme for traders and self-employed persons thus intends to provide old age protection and social security to traders and self-employed individuals. These can be shopkeepers, rice mill owners, small hotel owners, and commission agents. The scheme offers financial security to these individuals during their old age when they may not have a regular source of income.

• Age: The minimum and maximum entry age for this scheme is 18 and 40 years, respectively.

• Profession: Individuals eligible for this scheme must be retail traders, shopkeepers, or self-employed individuals.

• Coverage: People applying for NPS-Traders should not be a part of the organized sector, or covered by NPS, ESIC, and EPFO. Additionally, they should not be an income taxpayer or a beneficiary of the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM).

• Turnover: The annual turnover of these individuals should not exceed ₹1.5 Crores.

• Bank Account and Aadhaar Card: The individual must also possess their Aadhaar Card, and a savings bank account or a Jan Dhan account number with IFSC.

• Income After Retirement: You will receive a minimum amount of ₹3,000 per month once you turn 60. This will serve as your pension amount after retirement.

• Convenience: The contribution will be automatically debited every month through the auto-debit facility of your savings account or Jan Dhan account, until you turn 60.

• Flexible Exit Provisions: The government has provided flexible exit provisions.

• If you exit the scheme within 10 years, only your contribution will be returned to you with the savings bank’s interest rate.

• If you exit after 10 years but before turning 60, you will receive your contribution with the accumulated interest earned by the fund, or at the savings bank’s interest rate.

• In the event of your demise, and provided you’ve made regular contributions, your spouse will be eligible to continue the scheme. Alternatively, they can exit and receive your contribution with the accumulated interest rate earned by the fund, or at the savings bank’s interest rate.

• If you become permanently disabled before turning 60, and have made regular contributions, your spouse can continue the scheme. Alternatively, they can exit by receiving your contribution with interest actually earned by the fund, or at the savings bank’s interest rate.

You can easily apply for NPS for traders and self-employed individuals by following these steps.

 

• Visit your nearest Common Services Centre (CSC).

• The Village Level Entrepreneur (VLE) will request your Aadhaar Card, details of your savings or Jan Dhan bank account, and the IFSC code.

• You must make an initial contribution in cash to the VLE. You can make the other contributions via the auto-debit facility of your savings or Jan Dhan bank account.

• The VLE will enter your Aadhaar number, name, and date of birth into the system for authentication.

• The online registration will be done by the VLE by entering other details, such as your bank account details, phone number, email ID, GSTIN, etc.

• Your monthly contribution will be automatically calculated by the system based on your age.

• The VLE will print the enrollment-cum-auto-debit mandate, and you must sign the form. The form will then be scanned and uploaded into the system.

• A unique Vyapari Pension Account Number (VPAN) will be generated by the system, and the VLE will print the Vyapari card.

 

The LIC branch offices, labour offices of State and Central governments, and the ESIC/EPFO offices will serve as facilitation centres to provide complete information about the scheme.

The National Pension Scheme for Traders and Self-Employed Persons Yojana aims to offer social security coverage to retail traders and self-employed individuals in the unorganized sector. This ensures that they get a regular pension to support their livelihood after retirement. It is a positive step towards enhancing and ensuring the financial well-being and social security of trading and the self-employed community in the country.