Mumbai, Sep 11: India is looking to use digital technology to expand pension coverage among workers in the unorganised sector, many of whom do not have access to regular employer-backed retirement benefits.
The Pension Fund Regulatory and Development Authority (PFRDA) is developing easier digital solutions to help millions of such workers join the formal pension system. The focus is on making registration, contribution and access to pension services simpler through mobile-based platforms.
A key initiative in this direction is the NPS Instant platform, which uses a UPI-based digital framework. It is designed to allow users to open a pension account through their mobile phones and make contributions digitally through UPI.
The move could make pension enrolment more convenient for workers who may otherwise find traditional registration processes difficult or time-consuming. By bringing pension services closer to people through familiar digital payment systems, the initiative is also expected to support wider financial inclusion.
The e-Shram database maintained by the Ministry of Labour could further strengthen this effort. The database contains verified information on a large number of workers and can potentially help simplify pension account opening and identification of eligible beneficiaries.
PFRDA is also working on multilingual and user-friendly digital solutions so that pension services can reach people across different regions and language groups. The broader objective is to make retirement planning easier to understand and access, particularly for workers outside the formal employment system.
Another area under consideration is the development of pension products offering guaranteed returns. PFRDA is examining different options for creating such products for the non-government sector. While the Unified Pension Scheme includes a guarantee mechanism for government employees, developing a comparable framework for other workers presents additional challenges.
An expert committee is currently examining the issue, while PFRDA is also working on products that could potentially support future guaranteed-return pension offerings.
The regulator has also completed the proof of concept for a new product called ‘Swastya’. Final guidelines for the product are expected shortly, with its formal launch likely within the next 30 days.
The increasing use of technology in pension services could have a wider impact on India’s financial ecosystem. Easier pension access can encourage more workers to begin long-term savings, strengthen financial security after retirement and gradually increase the participation of the unorganised workforce in formal financial systems.
At the same time, India’s bond market is seeing growing interest from retail investors. Online Bond Platform Providers are contributing to this trend by making bond investments more accessible to individual investors.
Together, these developments point towards a broader shift in India’s financial sector, where digital platforms are increasingly being used to expand access, simplify financial products and bring more people into formal financial systems.
