Finance Minister Arun Jaitley has said that the Pradhan Mantri Vaya Vandana Yojana (PMVVY) will provide a respectable rate of return to senior citizens at a time when interest rates are falling globally.
As per reports, PMVVY is a pension scheme exclusively for senior citizens (aged 60 years and above) which is available from May 4, 2017 to May 3, 2018. It provides an assured return of 8 per cent per annum payable monthly (equivalent to 8.30 per annum effective) for 10 years.
Commenting on the issue, Finance Minister Arun Jaitley told the media, "There is a critical balance which we have to maintain. We live in a world where for the efficiency of the economy, our banks and other institutions are expected to lend at an affordable rate and if the lending rates go down obviously borrowing is also impacted that is considered essential and inevitable for an efficient economy."
"But it then throws an incidental problem which is also very important issue to be addressed, which is that the senior citizens really want a no-risk investment and they want a non fluctuating and ... reasonable rate of return because (they are) not being gainfully employed at that age," he added.