Mahatma Gandhi Pravasi Surksha Yojna (MGPSY)

The Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY) is a voluntary social security scheme launched by the Government of India for overseas Indian workers, particularly those holding Emigration Check Required (ECR) passports and working in Emigration Check Required (ECR) countries. The programme aims to provide financial and social protection to migrant workers by encouraging them to save for their retirement, repatriation, and resettlement upon return to India.

Background and Genesis

India has one of the largest diasporas in the world, with millions of Indians employed abroad, particularly in the Gulf Cooperation Council (GCC) countries and Southeast Asia. A significant portion of these workers belong to the low-skilled or semi-skilled category and often face precarious employment conditions with limited access to social security benefits in host countries.
Recognising this vulnerability, the Ministry of Overseas Indian Affairs (MOIA)—now merged with the Ministry of External Affairs (MEA)—launched the Mahatma Gandhi Pravasi Suraksha Yojana in 2012 as a pilot initiative. The scheme was designed to empower overseas Indian workers by offering a structured mechanism to save for their old age, return, and resettlement, while ensuring a measure of life insurance and pension security.
The scheme was inspired by Mahatma Gandhi’s vision of self-reliance, thrift, and dignity of labour, seeking to transform remittances into long-term assets that could support both individuals and the nation’s economic development.

Objectives of the Scheme

The Mahatma Gandhi Pravasi Suraksha Yojana was launched with three key objectives:

1. Savings for Return and Resettlement:To help migrant workers accumulate savings that can assist them in resettling in India after completing their overseas employment.
2. Old Age Pension:To provide financial security in old age through participation in a pension fund scheme.
3. Life Insurance Coverage:To ensure life insurance protection during their period of overseas employment.

Thus, MGPSY integrates social security, savings, and insurance into a single platform aimed at ensuring long-term welfare for Indian workers abroad.

Target Beneficiaries

MGPSY specifically targets:

• Overseas Indian workers holding ECR passports, typically those with lower levels of education and skills.
• Workers employed in ECR countries, including the Gulf region and parts of Southeast Asia.
• Both male and female migrant workers aged between 18 and 50 years at the time of enrolment.

Non-ECR passport holders were also allowed to participate voluntarily, although the scheme was primarily intended for vulnerable categories of migrant workers.

Structure and Key Features

The MGPSY scheme is voluntary and contributory, meaning that both the worker and the Government of India contribute to the scheme. It functions as a hybrid social security system combining pension, savings, and insurance benefits.
The key components include:

1. Pension Fund:
   • Implemented in collaboration with the Pension Fund Regulatory and Development Authority (PFRDA).
   • Workers contribute regularly to the National Pension System (NPS)-Lite, a simplified version of NPS designed for low-income groups.
   • The Government of India provides co-contributions to encourage participation and boost retirement savings.
2. Return and Resettlement Fund:
   • Designed to help workers save a portion of their earnings for use upon returning to India.
   • The savings are accumulated in a bank-linked account, which the worker can access after repatriation.
3. Life Insurance Coverage:
   • The scheme integrates the Pravasi Bharatiya Bima Yojana (PBBY), providing life insurance and accident coverage during the overseas employment period.
4. Government Co-Contribution:
   • The Government contributes an additional amount to participants’ pension and resettlement funds, subject to certain conditions such as regular contributions and income limits.

Enrolment and Implementation Mechanism

Enrolment under MGPSY was facilitated through:

• Indian Missions and Consulates in ECR countries.
• Banks and financial institutions authorised by the Ministry.
• Overseas Workers Resource Centres (OWRCs) and Protector of Emigrants (PoE) offices in India.

Applicants were required to:

• Possess a valid ECR passport.
• Be registered with the Pravasi Bharatiya Bima Yojana.
• Have an active bank account in India and an NPS-Lite account for contributions.

The scheme leveraged technology for account management and was designed to ensure transparency and portability, enabling participants to continue their savings even after returning home.

Benefits to Migrant Workers

The MGPSY provided a comprehensive range of benefits to overseas Indian workers:

• Financial Security: Encouraged systematic savings for old age and return.
• Government Support: Additional contributions from the Government enhanced the final corpus.
• Social Protection: Integrated insurance coverage provided safety against unforeseen events such as death or disability.
• Portable Benefits: Contributions and accumulated savings were portable across locations, both overseas and within India.
• Financial Inclusion: Linked workers to the formal financial system through banking and pension accounts.

Challenges and Limitations

Despite its well-intentioned design, the MGPSY faced several practical challenges that limited its large-scale success:

• Low Awareness: Many migrant workers were unaware of the scheme’s existence or its benefits.
• Complex Procedures: Enrolment processes, documentation requirements, and technical formalities deterred participation.
• Limited Outreach Infrastructure: The number of facilitation centres abroad was insufficient to cover all ECR countries effectively.
• Short Employment Duration: Migrant workers on short-term contracts were often reluctant to commit to long-term savings.
• Overlap with Other Schemes: Lack of integration with existing pension and insurance schemes created confusion among workers.

Due to these constraints, the scheme witnessed relatively low enrolment figures during its pilot phase.

Policy Revisions and Integration

In subsequent years, the Government of India explored ways to streamline and integrate MGPSY with broader national financial inclusion and social security initiatives such as the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Atal Pension Yojana (APY), and Pradhan Mantri Suraksha Bima Yojana (PMSBY).
The merger of the Ministry of Overseas Indian Affairs (MOIA) with the Ministry of External Affairs (MEA) in 2016 led to institutional restructuring. The focus shifted towards consolidating welfare initiatives for overseas Indians under a unified administrative framework. While MGPSY’s original model was phased down, its core objectives continue to influence ongoing migrant welfare programmes, including enhanced insurance and pension mechanisms for Indian workers abroad.