Anil Gupta
IN India, illness, accidents, or the loss of an earning member can severely strain low-income households. Many informal workers also face financial insecurity in old age, due to the lack of social protection. Formal social protection systems, such as insurance, pensions, and public welfare, are the norm in many parts of the world. In India, however, these systems have yet to cover the informal sector.
Insurance penetration in India has struggled to take root. High premiums, lack of awareness, and low trust have kept insurance penetration low. Long-term security often takes a back seat to daily survival for poor households. Instead, families rely on informal arrangements, such as family support, community help, or private borrowing. In 2019, India’s pension coverage stood at just 30 per cent, far behind its Asian counterparts, such as China, Japan, and South Korea.
The Government of India launched the Jan Suraksha programme in May 2015. Introduced alongside the Pradhan Mantri Jan Dhan Yojana (PMJDY), these programmes sought to extend basic social security to the unprotected majority. They included life insurance through the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), accident insurance via the Pradhan Mantri Suraksha Bima Yojana (PMSBY), and a contributory pension under the Atal Pension Yojana (APY).
Most impactful effort
A study by MicroSave Consulting (MSC) shows that these programmes represent India’s most impactful effort to extend risk protection to its unserved and underserved citizens. Ten years on, they have achieved remarkable scale. The PMJJBY offers life insurance of Rs 200,000 for an annual premium of Rs 436, just over Rs 1 a day. By January 2025, enrolment had reached 225 million, up from 31 million in FY 2016-17. Its claims settlement ratio now stands at 96 per cent.
The PMSBY provides accidental insurance of Rs 200,000 for Rs 20 a year. Open to account holders aged 18 to 70, the programme had reached 491 million cumulative enrolments by January 2025. Out of 198,446 claims received, 150,805 were settled, with total payouts amounting to Rs 2,994.75 crore. The claims settlement ratio was 75 per cent.
The APY, though more complex, has grown steadily. The programne targets informal workers between 18 and 40 and guarantees a monthly pension of Rs 1,000 to Rs 5,000, depending on contributions. As of January 2025, 73.3 million people were enrolled, up from 15.4 million in March 2019. The expansion of these programmes owes much to the infrastructure created by the PMJDY. The opening of millions of bank accounts allowed for broader financial access. As highlighted in MSC’s study, the autodebit feature linked to Jan Dhan accounts simplified premium payments for PMJJBY and PMSBY and eliminated the need for manual renewals. Moreover, PMJDY’s broad outreach and financial literacy efforts boosted awareness and positioned these programs as vital safety nets.
Major gaps remain
Beyond numbers, these programmes’ actual impact is reflected in the everyday lives they have touched. A woman in Bihar, widowed without warning, could pay off debts and continue her children’s education after receiving a life insurance payout. A street vendor in Uttar Pradesh contributes to APY each month, hoping for a pension that might allow some dignity in old age. These quiet stories often go unnoticed.
However, some significant gaps remain. Many eligible people remain unaware of these programmes. Claim processes are still tricky, especially for rural households with limited digital access or formal support. The coverage value has also failed to keep pace with inflation. While technology helps, trusted intermediaries remain essential – someone to explain, assist, and advocate.
Sustainable growth
Looking ahead, much depends on policymakers’ willingness to invest in delivery systems that reach the last mile. Strengthening accountability, supporting human interfaces, and enhancing grievance resolution will ensure equity and trust. As India aspires to become a $5-trillion economy, social security cannot be treated as an afterthought. Between 2014 and 2024, the economy nearly doubled. Yet, insurance penetration remained modest at 3.7 per cent, and insurance density was just $95 in FY24, far below the global average of 7 per cent and $889.
Economic growth that leaves millions unprotected is neither inclusive nor sustainable. The Jan Suraksha programmes are a step in the right direction. However, they will require steady work for their continuous expansion among the needy, more awareness, better implementation, meaningful coverage, and continued policy attention and investment to ensure that social security reaches those who need it most.
