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India refunds deposits made by workers to defunct pension scheme

Government revamps mandatory insurance scheme for blue-collar workers

17:14 November 11, 2017

Abu Dhabi: The Indian government has started refunding money deposited by blue-collar workers who had subscribed to a pension and life insurance fund that was shut down earlier this year, a senior Indian official told Gulf News.

The workers who had deposited money in the Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY) can get their money back from the banks or financial institutions [that received the funds], said Dinesh Kumar, first secretary and counsellor, Community Affairs at the Indian Embassy in Abu Dhabi. He said some of the subscribers might have already left the UAE and others may not be aware of the procedure for closure and refund of accumulated amount in specific part of the scheme. “They all can contact the embassy’s Indian Workers Resource Centre (IWRC) that will give guidance and assistance to the workers in this regard,” Kumar said.

Workers can contact IWRC on toll-free phone 80046342 or email help@iwrcuae.in

The scheme performed well and offered 9.4 per cent average return per year, the official said.

As Gulf News reported on February 14, citing poor response from workers, the government decided to discontinue the MGPSY, which was first launched in the UAE in 2012 in its pilot phase before introducing in 16 other countries. The voluntary scheme offered three important benefits for skilled and unskilled workers: To save money for old age, to have financial means when they go back home and a life insurance cover during their stay abroad.

The Ministry of Overseas Indian Affairs during the previous Manmohan Singh government’s tenure introduced the scheme for workers in 17 countries, including the Gulf nations, where five million Indian workers holding Emigration Clearance Required (ECR) category passports are living.

India issues ECR passports to those who have not passed grade 10.

Following the closure of MGPSY, the government said it would strengthen another mandatory insurance scheme, Pravasi Bharatiya Bima Yojana (PBBY), for blue-collar workers.

As Gulf News reported on July 29, the government revamped PBBY with effect from August 1, with an online provision to renew policy, increased amounts of insurance coverage in various cases, and new powers to Indian missions to certify health conditions and labour cases (instead of certificates from foreign governments).

A Gulf News report on March 5 had highlighted such difficulties faced by workers, including a 14-day time frame for the insured to commence the journey for the overseas job for the insurance to be valid. Such requirements were withdrawn in the revamped scheme.