The Pradhan Mantri of India
Narendra Modi has launched
another flagship social security scheme: Pradhan Mantri Suraksha Bima Yojana (PMSBY) – An accidental Death and Disability insurance scheme.
A large part of the Indian population lives in rural areas and
most of them are not covered under any kind of social security scheme. A large
section of this population has not even gained the benefits of the banking
system and most are still unaware of various governmental schemes that are
launched from time to time.
To correct this serious anomaly in the lives of ordinary and
poor people, the Pradhan Mantri
of India has launched the PMSBY scheme in Kolkata on 9 May 2015, along with two
other insurance- and pension-related schemes. Such is the seriousness of the
government to make these schemes a success that almost the entire senior
Cabinet has fanned out to various state capitals and major towns to
simultaneously launch the scheme and ensure its successful implementation.
So what makes this scheme
stand out from other social security schemes launched by the previous
There are two aspects of PMSBY that make it different in
offering and approach. Firstly, it is the sheer size and depth of inclusion to
bring and get covered the maximum number of people under this scheme, which
kind of makes it very ambitious and challenging.
Today, if an earning member of a family becomes permanently
disabled or dies an accidental death, his or her
family faces a life in penury and hardship, with no protection or support from
any institution or group. By joining the PMSBY scheme and by paying a nominal
premium of Rs. 12/- per person per
year, he or she will get an insurance cover for a sum of Rs. 2,00,000/- (two lakh)
in case of accidental death or permanent full disability or a sum of Rs. 1,00,000/- (one lakh) in case of partial but permanent disability. The
scheme will be valid for a year and it can be renewed every year.
A lot of government social security schemes have not had a very
positive response from people due to lack of financial system infrastructure at
a nearby location and moreover, the paperwork involved in opening accounts or
making claims was too much for them to handle. Even the leakages in the system
resulted in large sections remaining excluded from the benefits of these
schemes. This has now been largely addressed by the present government that has
made extensive use of technology to augment its social scheme delivery and
monitor mechanisms. All the payments will be directly credited to the
beneficiary’s account with no scope for leakages.
Who is eligible to be
covered under PMSBY?
Any person between the age of 18 and 70 with a savings bank
account and Aadhaar Card can join the scheme.
A person will need to fill out a simple form, mentioning the
name of the nominee and linking the Aadhaar Card to
the bank account. The person will need to submit the form each year before 1st
June to continue the scheme.
With this, the account can be easily activated and the entire
premium due will be auto-debited from his or her account. In other
words, all a person has to do is to open a bank account and then ensure the
availability of at least Rs. 12/- before 1st June of each year to ensure
automatic renewal of the scheme. A person has the option to go in for a
long-term inclusion under the scheme by instructing the bank to auto-renew the
scheme every year.
Who will implement the
All government-sponsored general insurance companies will offer
the scheme, while other insurance companies will have the option to join the
program delivery by signing-up with banks.
Will I get any tax
benefits on joining the scheme?
The entire premium paid by the subscribers will be tax free
under Section 80C. Furthermore, all the proceeds received up to Rs. 1,00,000/- (one lakh) will be tax
exempt under Section 10(10D). For all the proceed amounts exceeding Rs.
1,00,000/-, a TDS at the rate of 2% of the total proceeds will apply if Form
15H or Form 15G is not submitted to the insuring agency.
So what made the present
government kick start three major social security programs at one go?
The present government led by PM Narendra
Modi is going to complete one year in office and has realised that their performance will come under close scrutiny
for gap analysis between poll promises and actual deliverables after staying in
power for one year.
The government has come under some criticism for not speeding up
the government spending, especially in the much needed infrastructure and
manufacturing sectors, both of which are tied to various pending bills in the
Parliament, including the implementation of Goods and Service Tax (GST) and the
vital Land Acquisition Bill. The government is, therefore, keen on not only
announcing these social security schemes but also giving it the adequate push
that it needs to ensure deeper penetration amongst various sections of people
who really need them.
While it is true that the Jan-Dhan Yojana has achieved remarkable milestones in a short period
of time in terms of the number of accounts opened, it is also equally true that
a lot of these accounts remain with zero or minimal balance, thereby negating
the very purpose for which they were opened in the first place.
The PMSBY scheme will take a year for it to be implemented
across a wide section of people and next year around this time will be a good
time to do a reality check on what was targeted and what had been achieved in
terms of actual impact.
Meanwhile, the general mood remains buoyant and hopeful that PM Modi will come out considerably true on his promises of
taking India on a path of accelerated development and that the PMSBY scheme
will play its part in the overall success of the present government.
For further information on Pradhan Mantri Suraksha Bima Yojana (PMSBY) , please log onto: www.jansuraksha.gov.in or
www.financialservices.gov.in. One can also call the National toll free numbers: 1800
110 001 / 1800 180 1111. StateWise Toll free number
are listed in this document – http://www.jansuraksha.gov.in/PDF/STATEWISETOLLFREE.pdf
PMSBY Application Form
The application form can be downloaded from
http://www.jansuraksha.gov.in/FORMS-PMSBY.aspx. The forms are available in
different languages – English, Hindi, Gujarati, Bangla,
Kannada, Odia, Marathi, Telugu and Tamil.
For information on Frequently Asked Questions on Pradhan Mantri Suraksha Bima Yojana
(PMSBY) , please log
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Bima Yojana (PMSBY) in