Govt weighs making National Pension System mandatory for gig workers

Government weighs mandatory NPS coverage for gig and unorganised workers, explores auto-enrolment and digital onboarding to widen pension net and boost long-term retirement security

The government is examining the possibility of making the National Pension System (NPS) mandatory for gig workers and other segments of the unorganised workforce, as part of a broader push to expand pension coverage across the country, according to senior government officials. 

“The proposal is being discussed under the wider agenda of extending pension coverage to all citizens. Further deliberation will be carried out to decide whether to make it voluntary or mandatory for gig workers and other unorganised workforce,” said the official. 

The source further added that the discussions also cover measures to deepen and widen the reach of the Atal Pension Yojana (APY), which currently has around 86 million subscribers. However, persistence remains a concern, hovering at roughly 50 per cent, according to official data. “Increasing the ambit of APY in terms of higher pension to attract more beneficiaries is also under consideration.  “There is also a strong view that we must incentivise those at the bottom of the pyramid to improve participation and long-term continuity,” a government source said. 

An email sent to the Pension Fund Regulatory and Development Authority and the finance ministry seeking comments in this regard remained unanswered till the time of going to press. 

The suggestions received by the department of financial services (DFS) during inter-departmental consultations include mandating private sector organisations to enable NPS within their establishments and introducing auto-enrolment of employees. 

“The idea is aimed at ensuring that employees, especially in smaller firms, are automatically brought into the pension net unless they opt out,” said the official.

 

The official added that the government is also thinking of involving pension sakhis alongside business correspondents to boost APY enrolments and improve awareness, particularly in semi-urban and rural areas. 

“The role of states was also discussed, with a suggestion that contributory pension schemes should see broader participation, while state-level schemes could become supplementary in nature,” said the official. 

The source also deliberated on enhancing NPS penetration among gig workers, MSME employees, women and rural populations. “The penetration of NPS among gig workers, MSME workforce, women and in rural areas needs focused attention,” the official said, adding that coordination between various departments would be essential. 

“In a move aimed at leveraging digital infrastructure, a proposal for one-click opening of NPS accounts for UPI users was also placed on the table,” the official added.