FM Nirmala Sitharaman launches NPS-Vatsalya Scheme for child savings

Finance Minister Nirmala Sitharaman yesterday launched the NPS Vatsalya scheme in New Delhi. The scheme was announced in the Union Budget 2024-25. In her address, Ms. Sitharaman said that through NPS Vatsalya, the child gets an advantage of high returns from the time that the money is saved. She said the NPS scheme has generated competitive returns since its inception.

The Minister said that for the government sector, NPS, on average, has given returns of 9.5 percent compound annual growth rate (CAGR) since its inception. She said that in the non-government sector, since inception, the permitted asset classes have delivered CAGR returns of 14 percent for equity, 9.1 percent for corporate debt, and 8.8 percent for government securities. She suggested that parents and guardians should consider investing in NPS Vatsalya for their minor kids for their birthdays and other occasions.

Speaking on the Unified Pension Scheme UPS, Ms. Sitharaman said the Cabinet recently approved it for central government employees, which will be effective from 1st



April 2025. She said it has the best elements of the old pension scheme as well as the new pension scheme, and it provides an assured pension after retirement.

Minister of State for Finance Pankaj Chaudhary said NPS Vatsalya gives social security and makes the society self-reliant.

Secretary Department of Financial Services M Nagaraju said pension is a matter of significant importance to each individual and society. He said NPS Vatsalya is a very important scheme as it is covering the age gap that was left out of the pension scheme till now.

The Finance Ministry said NPS Vatsalya will allow parents to save for their children’s future by investing in a pension account and ensure long-term wealth with the power of compounding. The scheme offers flexible contributions and investment options, allowing parents to make investments of at least one thousand rupees annually in the name of the child, thus making it accessible to families from all economic backgrounds.