Atal Pension Yojana: War of words erupt between Sitharaman and Jairam Ramesh

livemint.com:

Nirmala Sitharaman and Congress leader Jairam Ramesh over the effectiveness of Atal Pension Yojana (APY). It was started when the Mr Ramesh pointed out that while the FM lauded the pension scheme named after the veteran BJP leader Atal Bihari Vajpayee on Mar 24 in Bengaluru, she did not mention, he alleged, that 83 percent of the subscribers are in the lowest slab of ₹1,000 pensions. He quoted a study by Indian Council of Social Science Research to show that nearly one-third of subscribers who dropped out of the pension scheme did so because their accounts were opened without any explicit permission.

The study also shows that while 32 percent of the subscribers dropped out due to the bank opening the APY account without permission, 38 percent closed accounts because they wanted more money and 15 percent did not have money to run the account. The Union Finance Minister gave a detailed rebuttal to these allegations and even quoted the legendary economists Richard Thaler and Cass Sunstein. She wrote on her X account that Jairam Ramesh is being ignorant of the basis tenets of designing a good pension account.

1 Atal Pension Yojana is designed based on best practice choice architecture to automatically continue the premium payment unless the subscriber chooses to opt out. This is a feature added deliberately based on economic research, as she points out. This means the contribution continues year after year until the subscriber wants to discontinue the scheme.

2. The scheme offers a minimum of 8 percent return irrespective of the prevailing rates of interest. And in case there is a shortfall, the government even pays a subsidy to the PFRDA.

3. She rebuffed the allegation of hoodwinking and coercing investors. She also hit