Indian expat alert: Dubai launch for saving, insurance, retirement scheme targeting 5 million Gulf workers

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A new voluntary pension and life insurance fund for Indian expatriate workers abroad will be formally inaugurated in the UAE by the Indian Minister for Overseas Indian Affairs, Vayalar Ravi.

India’s Ministry of Overseas Indian Affairs introduced the Mahatma Gandhi Pravasi Suraksha Yojana for the Overseas Indian workers with Emigration Check Required (ECR) on their passports.

While many pension and welfare schemes have been launched and abandoned in the past, the new scheme will be launched for the GCC on October 28, 2013, at the Indian Consulate in Dubai.

Male or female Indians in the age group of 18 to 50, who are migrating to work in the GCC or have already migrated, can join the scheme through locally appointed agents.

The Life Insurance Corporation (LIC) and Bank of Baroda have been appointed as the main service providers for overseas Indian subscribers to the scheme.

About 65 per cent of the 2 million Indian workers in the UAE will be eligible to join the scheme, but the response so far has been poor.

A major campaign is planned in association with Indian community associations, the Indian Workers Resources Centre, Bank of Baroda and other partners in the scheme, to encourage all workers to subscribe to the scheme.

Indian Ambassador to the UAE M K Lokesh and other diplomats and dignitaries will take part in the inaugural programme.

Even though the scheme was operational from May 1, 2012 (International Worker’s Day), the response has been lukewarm and a majority of the Indian blue collar workers are yet to show interest in the pension and welfare fund named after Mahatma Gandhi, India’s ‘Father of the Nation’.

The scheme is launched with an ambitious plan to encourage and enable overseas Indian workers to save for their return and resettlement, old age and to obtain a life insurance cover against natural or accidental death or disability during the period of coverage.

The Government of India will make a contribution for a period of five years or till the subscriber returns to India.

The ministry will appoint agents to address their grievances.

According to the scheme details made available by the ministry, the Indian Government will contribute Rs1,000 per annum* in line with Swavalamban platform for all subscribers who save between Rs1,000 and Rs12,000 per year under the NPS-Lite programme.

The scheme also offers a special government contribution of Rs900 towards Return and Resettlement (R&R) of the overseas Indian workers who save Rs4,000 or more per annum.

An estimated 25 million Indians work across 110 countries, according to ministry estimates.

Over five million semi-skilled and unskilled Indian nationals with Emigration Check Required (ECR) on their passports are currently working on temporary employment or contract visas, predominantly in construction, household and healthcare service sectors in the Gulf.

Periodic earnings of these workers are rarely converted into savings. The change in earnings creates a temporary improvement in individual economic conditions of workers but ultimately, the workers face poverty when they back in India, says a report by the ministry.

Each subscriber will get a ‘PRAN Card’, an identity card with photograph, name and signature.

Each subscriber can contribute as little as Rs100 per month and there is no fixed monthly contribution.

The Service Provider collects the money, and issues a receipt to the subscriber. He then deposits the collections every Friday (by uploading on the system) in a designated NPS-Lite Bank Account.

The Unit Trust of India Asset Management Company has been appointed to operate the Return and Resettlement scheme.
The savings under the scheme will be invested under the Monthly Income Scheme of UTI.

Life insurance coverage is provided through the Janashree Bhima Yojana, a group insurance scheme that will give Indian Rs30,000 in case of natural death of the subscriber, Rs70,000 in case of accidental death or permanent total disability and Rs35,000 for partial disability in an accident.

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