Mahatma Gandhi Pravasi Suraksha Yojana

The Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY) is a voluntary social security scheme launched by the Government of India in 2012 for overseas Indian workers. The scheme is designed to provide long-term financial security, pension, and return benefits to Indian emigrant workers employed in Emigration Check Required (ECR) countries, particularly in the Gulf region.
The MGPSY was formulated by the Ministry of Overseas Indian Affairs (MOIA) (now merged with the Ministry of External Affairs) to help migrant workers save for their future — especially for retirement, repatriation, and resettlement — and to ensure protection against risks associated with migration.

Objectives

The Mahatma Gandhi Pravasi Suraksha Yojana was created with three primary goals:

1. Old-Age Pension: To help overseas Indian workers build a retirement savings corpus for old age.
2. Return and Resettlement: To support workers financially upon their return to India, ensuring they have resources to resettle after their overseas employment ends.
3. Life Insurance and Savings Protection: To provide social security coverage for the worker and their family in case of death or disability.

The overarching purpose was to create a structured savings and social protection framework for low-income Indian workers abroad who often lack access to formal pension and insurance systems in their host countries.

Target Group

• Indian workers holding ECR passports, typically semi-skilled and unskilled labourers, who migrate to work in the Gulf Cooperation Council (GCC) countries — such as Saudi Arabia, UAE, Qatar, Oman, Kuwait, and Bahrain — and other notified ECR nations.
• Workers between 18 and 50 years of age who are registered with the Protector of Emigrants (PoE).

Features of the Scheme

The MGPSY is a voluntary, contributory savings-cum-insurance scheme, implemented in collaboration with financial institutions such as the Life Insurance Corporation of India (LIC) and the Bank of Baroda.
Key features include:

1. Three-Part Savings Structure: The scheme allows the subscriber to contribute to three separate accounts:
   • Pension Account: For long-term savings to generate a regular income after retirement.
   • Return and Resettlement Account: For short-term savings to be withdrawn when the worker returns to India.
   • Life Insurance Cover: To protect the family in case of the subscriber’s death.
2. Co-contribution by Government:
   • The Government of India provides a matching contribution under specific conditions to encourage participation.
   • For example, the government contributed ₹1,000 per annum to the pension account and ₹900 per annum to the resettlement account for eligible workers who contributed regularly for at least five years.
3. Portable and Accessible:
   • Workers could operate their accounts from abroad and continue contributions even after returning to India.
   • The scheme ensured accessibility through Indian missions, Bank of Baroda branches, and partner agencies in ECR countries.
4. Insurance Benefits:
   • Life coverage was provided through LIC.
   • In case of the subscriber’s death, the nominee received the insured amount plus accumulated savings.
5. Flexible Contributions:
   • The worker could choose how much to contribute each month, depending on their income and capacity to save.
6. Tax Benefits:
   • Contributions to the MGPSY were eligible for income tax deductions under Indian tax laws.

Implementation Mechanism

• The scheme was jointly implemented by:
  • Ministry of Overseas Indian Affairs (MOIA) — policy formulation and oversight.
  • Life Insurance Corporation of India (LIC) — management of insurance and pension components.
  • Bank of Baroda — handling of deposits, accounts, and remittances.
• Workers were required to enrol through Pravasi Bhartiya Bima Yojana (PBBY) centres, PoE offices, or Indian missions abroad.

Eligibility Criteria

To join the MGPSY, a worker had to:

1. Be an Indian citizen with an ECR category passport.
2. Be aged between 18 and 50 years.
3. Be employed in a foreign country with an Emigration Check requirement.
4. Have an active bank account with the Bank of Baroda.
5. Hold a valid Pravasi Bhartiya Bima Yojana (PBBY) insurance certificate.

Benefits

1. Financial Security: The scheme encourages long-term financial planning for workers who might otherwise lack access to pension systems.
2. Resettlement Assistance: The Return and Resettlement component provides a lump-sum amount to help workers rebuild their lives upon returning home.
3. Social Protection: Life insurance ensures that the family of the worker is financially protected in case of death.
4. Encouragement for Regular Savings: Regular contributions cultivate a culture of saving among migrant workers, often earning them additional government incentives.
5. Empowerment of Migrant Workers: Provides access to formal banking, insurance, and pension systems, reducing dependence on informal savings mechanisms.

Challenges and Limitations

While the MGPSY was well-intentioned, it faced several implementation challenges:

• Low Awareness: Many overseas workers were unaware of the scheme or found the enrolment process complicated.
• Limited Coverage: The scheme mainly targeted ECR passport holders, leaving out a large segment of skilled and semi-skilled migrants.
• Administrative Barriers: Coordination between banks, insurance providers, and government agencies across countries posed difficulties.
• Voluntary Nature: Since participation was not mandatory, enrolment remained lower than expected.
• Changing Employment Conditions: Frequent job changes and mobility of migrant workers disrupted regular contributions.

Relation with Other Schemes

The MGPSY complements other welfare schemes for migrant workers, such as:

• Pravasi Bhartiya Bima Yojana (PBBY): Provides mandatory life insurance for Indian emigrants.
• Emigration Act, 1983: Regulates recruitment and protects workers in ECR countries.
• Atal Pension Yojana (APY): A domestic pension scheme that later provided a similar model for long-term savings in India.

Current Status

After the merger of the Ministry of Overseas Indian Affairs with the Ministry of External Affairs in 2016, the MGPSY was reviewed along with other migrant welfare programmes. While the scheme has not been actively relaunched, many of its features have been incorporated into newer initiatives that promote financial inclusion and social security for migrant workers, both domestic and overseas.
The Government of India continues to work toward integrating migrant workers into formal financial systems through digital platforms, direct benefit transfer (DBT) mechanisms, and bilateral social security agreements with other nations.

Significance

The Mahatma Gandhi Pravasi Suraksha Yojana represents an important step in extending India’s social protection net beyond its borders. It acknowledges the contribution of Indian migrant workers — particularly those in the Gulf and Southeast Asia — who play a crucial role in the nation’s economy through remittances.