NPS is low-cost but it has some limitations as a retirement tool
Experts expect the new budget to make National Pension System more tax-efficient than it is at present
For Indian savers, National Pension System (NPS), a retirement saving instrument first set up in 2004, brings some powerful advantages. It is low-cost, allows exposure to equity (up to 75% of the corpus) and is reasonably tax-efficient. NPS is compulsory for government employees who joined service after 2004 and it was opened to the private sector in 2009. Despite its many advantages, a set of key limitations have prevented it from realizing its full potential as a market-oriented retirement product.