Sitharaman links pension reforms to the Atmanirbhar Bharat vision

New Delhi: Finance minister Nirmala Sitharaman on Wednesday said that the success of Atmanirbhar Bharat, a self-reliant India, depends as much on financially self-reliant households as it does on industry, arguing that robust pension and retirement solutions must become the centerpiece of India’s social security framework.

“The growth of any nation depends on the robustness of the social security framework that is provided to them,” Sitharaman said, stressing that recent reforms in the National Pension System (NPS) are designed to address both the supply and demand side of retirement planning and pension framework.

Speaking at a conference hosted by the Pension Fund Regulatory and Development Authority (PFRDA) in the national capital, the finance minister said the recent reforms were aimed at addressing both the supply and demand sides of India’s pension framework, from the industry as well as the consumer perspective.

“The fiscal gains of a robust pension system are actually real. Domestic savings deepen, and capital can be used for the long term,” she said.

“But the human gains are deeper....fewer families are pushed into distress by an illness and loss of income in old age, and more seniors living with agency and not dependency,” she added.

Reforms to strengthen NPS

India’s pension landscape is undergoing a sweeping overhaul, with reforms to NPS that promise greater flexibility, transparency, and accessibility for millions of subscribers. Shaped by provisions in the 2024 Union Budget and subsequent regulations, the changes effective October 1, 2025, allow non-government subscribers to invest up to 100% of their contributions in equities, manage multiple schemes under a single account, and benefit from faster settlement cycles.

Among the other reforms, the PFRDA has also rolled out measures to broaden participation, including the launch of NPS Vatsalya for minors and a Unified Pension Scheme for central government employees. To strengthen safeguards, Aadhaar-based authentication has been made mandatory, while simplified withdrawal and exit rules aim to make retirement planning more user-friendly.

Under the new framework, pension funds can design customized schemes tailored to different risk appetites, while revised charges for central record-keeping agencies (CRAs) and updated fees for government subscribers seek to balance sustainability with efficiency.

Together, these reforms mark one of the most ambitious efforts yet to expand retirement security in a country where the elderly population is set to more than double by mid-century, Sitharaman said.

Pointing to changes in employment trends, Sitharaman pointed out that modern aspirations for retirement go beyond mere subsistence.

“The traditional model of a single lifelong job with a defined pension is also becoming rare. Today's workforce is characterized by job mobility and entrepreneurship,” she said.

“This makes employers' pensions less reliable for an entire career and therefore places the onus on the individuals to build their own portable, long-term retirement plans,” she added.

The finance minister reiterated that the introduction of the NPS in 2004 by the then NDA government brought a crucial transition to a sustainable, sustainable, defined contribution pension framework.

“NPS offers flexibility and choice, and pays, and the architecture itself is safe, transparent, and also very regulated,” she said. “It also offers seamless mobility, moving seamlessly throughout one's career,” she added.