Also called the Mahatma Gandhi Pravasi Suraksha Yojana, these voluntary schemes allow workers to save for retirement, receive pension benefits, and accumulate life insurance cover of up to AED 6,500 during their time spent working abroad.
The scheme has been launched in the wake of a recent study which found only five per cent of low and middle-income Indian expatriates would be able to live comfortably if they returned home.
A majority of the remittance sent back to India by overseas workers is rarely saved, and more often used to form a temporary boost for the worker’s family.
In the UAE, around 65 per cent of more than two million Indians are blue collar workers and they will receive the first opportunity to enrol in the scheme.
To be eligible, the worker needs to be aged between 18 and 50 and hold an Emigration Clearance Required passport (meaning they have not completed Grade 10).
The fine print
The Indian government will provide a contribution of up to AED 130 per year for male workers and AED 195 for female workers for up to five years or until the worker returns to India; whichever comes first.
In return, the workers have to contribute between AED 65 and AED 780 each year to their PLIF, and later pay AED 260 towards a return and resettlement fund.
Whilst only a small portion of the population has so far joined the scheme, large numbers are expected in October when it is officially launched and promoted.
This is a big step for the Gulf’s NRIs but these plans need to be strongly implemented and promoted to see a dramatic change in expatriate Indians’ welfare.
Whilst middle to higher-income Indians have the ability to save with ease (or, if they have worked and contributed to a UK pension, transfer their fund into a QROPS), this is the first step to assure other worker’s the same provision.
With figures estimating around 1,789,000 workers in Saudi Arabia, 719,000 in Oman and 500,000 in Qatar, these schemes need to be vigorously promoted by both governments and organisations to create a solid future for the Gulf’s NRI population.