Comments
Pension regulator PFRDA wants to push its National Pension System (NPS) product in a big way among the Non-Resident Indian (NRI) community, especially the blue-collared workers in the Gulf region.
Enrolling into NPS could provide the much needed social security for the large number of expatriates in the Gulf, PFRDA Chairman Hemant Contractor said here on Wednesday.
On the anvil is a focused communication strategy to popularise NPS among the NRIs.
Pension Fund Regulatory and Development Authority (PFRDA) will engage “more seriously” with points of presence service-providers such as banks to extend NPS to NRIs, said RV Verma, Member, PFRDA.
Contractor said that NRIs could now invest in NPS and that the Reserve Bank of India had also recently clarified that NPS, like mutual funds and insurance, was also an eligible investment for NRIs.
The Centre is also likely to soon clarify under the Foreign Exchange Management Act (FEMA) guidelines that NPS is an eligible investment for NRIs, he said.
NPS will also be added in the list of permissible investments (under FEMA), Verma said.
According to the Ministry of Overseas Indian Affairs (MOIA), India has the second largest Diaspora in the world, with around 29 million people living abroad.
MOIA estimates that 7.22 million people out of the total Diaspora live in the Gulf countries. The Gulf Cooperation Council, comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, has the largest emigrated India population.
The other main destinations for NRIs are Australia, Canada, Singapore, South Africa, the UK and the US.
Contractor also said that in due course PFRDA will come up with separate category for NRIs and such a move is expected to help the pension regulator get a better handle on the extent of response to the NPS from the Diaspora.
PFRDA Chairman also made it clear that there were no plans to allow Persons of Indian Origin (PIOs) or those with Overseas Citizenship of India (OCI) card to invest in NPS.
Tax issue Although PFRDA is doing its bit to make NPS popular among the NRI community, much would depend on the “taxability issue”, say experts.
As on date, withdrawals made from NPS are taxable. The moot issue is whether NPS withdrawals will they get tax exempt in the coming years or not.
An NRI investing in NPS will be concerned about the taxability and there is need to bring them on par with other government-approved savings schemes where withdrawals are tax exempt for such investors.
AK Pandey, Chief General Manager, RBI, said that the central bank had as on date no outstanding issues on the table as regards NPS.
If new issues emerge, the RBI will then be willing to take course corrections, Pandey said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.