How 'Provident' is The Provident Fund Savings In India: An Analysis

The paper analyses the pension and provident fund savings in India over a period of fifteen years from 1998-2013. The year 1999 was the 'International year of old persons'. The Government of India also formed Project OASIS to look into the aspect of old age savings and suggest reforms to the existing system of pension and provident fund. The New Pension System for government servants was introduced in 2004 and extended to general public in 2009. The earlier system prevalent since 1952 relied exclusively on investment in government bonds and securities. It arouses natural curiosity to know whether the public looked only for security of their savings and showed no regard for returns on their meagre savings. This paper analyses these issues and understands that with reforms in the provident and pension fund system, it is possible to achieve better returns. At the same time, inflation controlling efforts need to be carried on while encouraging people to save more.