Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY)

Learn about the Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY), a social security program designed to aid Indian workers abroad with ECR passports. Explore its features, benefits, and current status.

Introduction

Millions of Indians work overseas, contributing significantly to the nation’s economy. Recognizing their challenges, the Government of India launched the Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY) in May 2012. This voluntary scheme aimed to address the social security needs of Indian emigrants, particularly those holding Emigration Check Required (ECR) passports.

What was the Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY)?

MGPSY was a social security initiative targeting Indian expatriate workers in ECR countries. ECR passports are issued to individuals undertaking specific low-skilled or semi-skilled jobs abroad. The scheme offered a three-pronged approach to support these workers:

Saving for Retirement: MGPSY encouraged overseas workers to save for their golden years through a contribution towards a pension plan.
Saving for Return & Resettlement: The scheme provided financial assistance to facilitate a smooth transition upon returning to India.
Life Insurance Cover: MGPSY offered free life insurance, providing financial security for the worker’s family in case of unforeseen circumstances.

The objective of Mahatma Gandhi Pravasi Suraksha Yojana:

To encourage and enable the overseas Indian workers by giving government contribution to:

· Save for their Return and Resettlement (R&R)
· Save for their old age,
· Obtain a Life Insurance cover against natural death during the period of coverage.

Key Features of MGPSY

Voluntary Participation: Overseas Indian workers with ECR passports could choose to participate in MGPSY.
Contribution Options: Workers could contribute between ₹1,000 and ₹12,000 annually.
Government Matching Contribution: The Indian government matched a portion of the worker’s contribution, incentivizing participation.
Pension Plan: MGPSY channeled contributions towards the National Pension System – Lite (NPS-Lite) for retirement benefits.
Return & Resettlement (R&R) Benefit: The scheme provided a government contribution towards resettlement expenses upon returning to India. This amount varied depending on the worker’s contribution level.
Life Insurance Cover: Life Insurance Corporation of India (LIC) offered free life insurance coverage for natural death during the program period.
Additional Benefit for Women Workers: Female participants received an additional ₹1,000 government contribution for five years or until their return to India, whichever came first.

Benefits of MGPSY

MGPSY offered significant advantages to overseas Indian workers:

Financial Security: The scheme encouraged saving habits, leading to a secure financial future after retirement.
Life Insurance Protection: Free life insurance provided peace of mind for workers and their families.
Return & Resettlement Support: The R&R benefit eased the financial burden of reintegrating into Indian society.
Government Contribution: The matching contributions from the government boosted overall savings.

Current Status of MGPSY

While a well-intentioned initiative, MGPSY did not garner the anticipated response. Launched as a pilot program, it was initially rolled out in Kerala and specific regions within the United Arab Emirates (UAE). The scheme’s limited reach and specific eligibility criteria might have been contributing factors. Due to the lack of encouraging participation, the Government of India closed MGPSY on April 1, 2017.

Enrolment Process

The enrolment process for the MGPSY is as follows:

Eligible volunteers (applicants/participants) are enrolled by MOIA-appointed Service Providers.
Upon enrolment, an NRE Bank Account is opened in the name of the participant and linked to the scheme.
The participant’s contribution to the scheme is automatically deducted from this account and credited to the scheme.

Withdrawals

Subscribers can withdraw their savings under the following circumstances:

On Return: Participants can withdraw their Return and Settlement Savings upon returning to India.
On Retirement: A portion of the savings will be returned, while the remaining balance will be converted into a monthly pension.

The government contribution

· Rs. 1,000 p.a. to those who save between Rs.1,000 and Rs.12,000 per year in NPS-Lite.

· An additional contribution of Rs. 1,000 is available to women workers. (This contribution is for a period of five years or till the return of subscribed worker back to India, whichever is earlier).

· A special government contribution of Rs.900 by MOIA towards Return and Resettlement (R&R) of the overseas Indian workers who save Rs.4,000 or more per annum.

Role of Consulate General of India

In order to implement the Scheme, Consulate is planning to spread awareness about it amongst the eligible volunteers and for this purpose will soon be organizing awareness visits to the residential camps of potential Saudi employers in the southern and western regions of the Kingdom. Dates and venues of these visits will be intimated well in advance.

Alternatives to MGPSY

While MGPSY is no longer operational, the Indian government continues to support overseas Indian workers through various initiatives. Here are some alternatives to consider:

Atal Pension Yojana (APY): This government-backed pension scheme offers retirement benefits based on monthly contributions.
Pravasi Bharatiya Bima Yojana (PBBVY): This life insurance scheme caters specifically to overseas Indians.
Various welfare schemes: The Ministry of External Affairs offers various welfare programs to assist overseas Indian workers in distressful situations.

FAQ

Who was eligible for MGPSY?

Indian expatriate workers with ECR passports working in pilot program locations could participate in MGPSY.

What happened to the funds contributed under MGPSY?

For subscribers under 40 years old, their NPS-Lite accounts were migrated to the Atal Pension Yojana (APY). For those above 40, their accounts continue under the Pension Fund Regulatory and Development Authority (PFRDA). Insurance claims and R&R benefits arising before the closure date were settled by LIC and UTI, respectively.

Are there any alternative schemes for overseas Indian workers?

Yes, several programs offer support, including the Atal Pension Yojana (APY) for pension benefits and Pravasi Bharatiya Bima Yojana (PBBVY) for life insurance.

what is the life insurance amount under mahatma gandhi pravasi suraksha yojana

The life insurance amount under the Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY) varies based on the coverage provided. The scheme offers a life insurance cover of Rs. 30,000 per year against natural death and Rs. 75,000 against death by accident through the Janshree Bima. This insurance coverage aims to provide financial security to overseas Indian workers holding Emigration Check Required (ECR) passports, supporting them in times of need.

Conclusion

The Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY) aimed to provide a valuable social security safety net for overseas Indian workers. While the scheme ultimately closed due to low participation, it highlighted the government’s commitment to supporting its emigrant workforce.

Looking Forward

The Indian government continues to explore avenues for enhancing the well-being of overseas workers. Potential areas for improvement include:

Increased Awareness: Promoting existing social security schemes like APY and PBBVY among expatriate communities could significantly benefit more workers.
Expanding Reach: Tailoring schemes to cater to a wider range of worker categories and geographic locations would ensure broader inclusion.
Collaboration with Host Countries: Partnerships with governments in ECR countries could streamline access to social security benefits for Indian workers.

By addressing these aspects, the government can create a more robust social security framework for its overseas workforce. This will not only contribute to their financial security but also strengthen the overall well-being of the Indian diaspora.

Additional Considerations

Here are some additional points to consider:

Impact of MGPSY: While participation figures were low, it’s valuable to analyze the reasons behind them to inform future initiatives.
Role of NGOs and Community Organizations: These entities can play a crucial role in disseminating information and encouraging participation in social security schemes.
Technological Solutions: Utilizing online platforms and mobile applications can simplify access and enrollment processes for overseas workers.

The future holds promise for improved social security measures for overseas Indian workers. By learning from past experiences and implementing innovative solutions, the government can create a more secure and prosperous future for its global workforce.

How to contact

Work relating to MGPSY subscribers with Bank of Baroda has also been transferred to M/s. Alankit Assignments Ltd. Subscribers enrolled with Bank of Baroda are, therefore, advised to contact M/s. Alankit Assignments Ltd.

The contact details of all the service providers are given below:-

Alankit Assignments Limited, Alankit House , 4E/2 Jhandewalan Extension, New Delhi – 110055, 011-42541234, 011- 42541835 (M) +91-95 82 200593 (W) www.alankit.com
E-mail: atulb[at]alankit[dot]com
Alankit Global Resources DMCC Office No: 15L, Silver Tower, Cluster-I, Jumeirah Lake Towers, P.O.Box: 62494 Dubai, (UAE), Contact No. +971554557670 , +9714 4340899
E-mail: saurabhk[at]alankit[dot]com, alankitglobal@alankit[dot]com
IFMR Rural Finance, PRODUCT PARTNERSHIPS 10th Floor-Phase 1, IIT-Madras Research Park, Kanagam Village, Taramani, Chennai 600 113, Tel: +91 44 66687437 / Mobile: +91-9840787663
E-mail: Manohar.Kuduru[at]ifmr[dot]co[dot]in
ESAF Microfinance & Investments (P) Ltd. 1 EMFIL Head Office, Hephzibah Complex, 2nd Floor, Mannuthy, Trichur Kerala 680651, Contact No. +91-04872373813, 04873262113, (M) 09349030249
E-mail: hariharang[at]esafmicrfin[dot]com, info[at]esafmicrofin[dot]com