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Q29 (IAS/2017) Economy › Schemes, Inclusion & Social Sector › Social security schemes Official Key

Who among the following can join the National Pension System (NPS) ?

Result
Your answer:  ·  Correct: C
Explanation

The correct answer is option C because the proposed new pension scheme should be made mandatory for all new employees of the State Governments and the date of its applicability may be decided by the respective State Governments[1]. This makes all State Government employees joining after the notification date by their respective states eligible for NPS.

Option A is incorrect because NPS is not limited to resident Indian citizens only; it has broader eligibility. Option B is wrong as the age range 21-55 is not the definitive criterion for NPS eligibility. Option D is explicitly incorrect because NPS has been implemented for all Government Employees (except armed forces) joining Central Govt. on or after 01 January 2004[2], and NPS is mandatorily applicable on Central Government employees (except Armed Forces) recruited on or after 01.01.2004[3]. The key disqualifier in option D is the inclusion of Armed Forces and the wrong date (1st April instead of 1st January 2004).

Sources
  1. [1] https://prsindia.org/files/bills_acts/bills_parliament/2005/Bhattacharya_Committee_on_Pension_Liabilities_of_State_Governments.pdf
  2. [2] https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=128554
  3. [3] https://financialservices.gov.in/beta/en/nps
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PROVENANCE & STUDY PATTERN
Guest preview
Don’t just practise – reverse-engineer the question. This panel shows where this PYQ came from (books / web), how the examiner broke it into hidden statements, and which nearby micro-concepts you were supposed to learn from it. Treat it like an autopsy of the question: what might have triggered it, which exact lines in the book matter, and what linked ideas you should carry forward to future questions.
Q. Who among the following can join the National Pension System (NPS) ? [A] Resident Indian citizens only [B] Persons of age from 21 to 55…
At a glance
Origin: Mostly Current Affairs Fairness: Low / Borderline fairness Books / CA: 0/10 · 7.5/10
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This question is a classic 'Fine Print' test. While most aspirants know NPS exists, the trap lies in the specific exclusions (Armed Forces) and the exact eligibility criteria (NRIs, Age). It penalizes superficial reading of current affairs and rewards those who track the 'Exceptions' in major government notifications.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
Are only resident Indian citizens eligible to join the National Pension System (NPS) in India as of 2017?
Origin: Web / Current Affairs Fairness: CA heavy Web-answerable

Web source
Presence: 4/5
"it is expected that with financial literacy and awareness campaign, which is an integral part of the NPS, the number subscribers under voluntary NPS for all citizens and the Swavalamban would grow rapidly in the coming years."
Why this source?
  • States that the voluntary NPS is intended 'for all citizens', indicating eligibility is not limited to only resident Indians.
  • Refers to coverage of 'all citizens as on 31st March, 2011', showing an inclusive citizen-based eligibility approach.
Web source
Presence: 3/5
"Government of India in the Ministry of Finance vide notification number F. No. 5/7/2003-ECB&PR dated the 22nd December, 2003, shall be deemed to be the National Pension System with effect from the 1st day of January, 2004... (2) Notwithstanding anything contained in the said notification, the National Pension System shall, on the commencement of this Act, have the following basic features, namely:– (a) every subscriber shall have an individual pension account under the National Pension System;"
Why this source?
  • Describes the statutory commencement and basic features of the National Pension System, framing it as a system with individual subscribers.
  • Provides context that NPS is established by government notification and regulation rather than restricted solely by residency wording in these features.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 8: Inclusive growth and issues > 8.8 National/New Pension System (NPS) > p. 269
Strength: 5/5
“Private Sector • (a) Corporates: Companies can adopt NPS for their employees with contribution rates as per the employment conditions.• (b) All citizens of India: Any individual (aged between 18 70 years) not being covered by any of the above sectors has been allowed to join NPS on voluntary basis from May 01, 2009.• NRIs have also been allowed to open NPS account.• There are tax benefits under NPS but no need to go into such details.• NPS account can be opened only in individual capacity and not jointly.”
Why relevant

Says NPS allows 'All citizens of India' (aged 18–70) to join and explicitly states 'NRIs have also been allowed to open NPS account.'

How to extend

Use this to infer that non-resident Indian citizens (NRIs) are treated as eligible in addition to resident citizens and check year-specific rules or notifications around 2017 for confirmation.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 8: Inclusive growth and issues > 8.8 National/New Pension System (NPS) > p. 268
Strength: 4/5
“• National Pension System (NPS) is a pension cum investment scheme launched by Government of India to provide old age security to Citizens of India. The Scheme is administered and regulated by Pension Fund Regulatory and Development Authority (PFRDA) set up under PFRDA Act, 2013. National Pension System Trust (NPST) established by PFRDA is the registered owner of all assets under NPS.• NPS is broadly classified into two categories:”
Why relevant

Defines NPS as a scheme 'to provide old age security to Citizens of India' and classifies accounts by citizenship-related categories.

How to extend

Combine this with the explicit NRI allowance (snippet 1) to explore whether eligibility was limited by residency or by citizenship status in 2017.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 1: National Income > Please note: > p. 7
Strength: 3/5
“• A person residing for one year or more in India is considered as ordinarily residing in India. A normal resident may or may not be a citizen of India. • A person has economic interest in India if he carries out his economic activities like production, consumption or investment in India at a significant scale as compared to his wealth and income. Normal Residents also include: • 1. Indians working in the Indian embassies abroad (e.g. ambassadors, etc.) • 2. Foreign citizens living in India for more than one year. (However, foreigners who come to India for medical treatment or study purpose are not considered normal residents even if they stay for more than one year.) Normal Residents do not include: • 1.”
Why relevant

Defines 'ordinary resident' and distinguishes residents from foreign citizens, giving a sense of how 'resident' status is treated in Indian policy texts.

How to extend

A student could use the resident/ordinary resident definitions to judge whether 'resident citizen' is a necessary criterion for schemes like NPS, by comparing with rules that explicitly mention NRIs.

Indian Polity, M. Laxmikanth(7th ed.) > Chapter 7: Citizenship > Table 7.1 Comparing NRI, PIO and OCI Cardholdersl > p. 70
Strength: 3/5
“No.: 2.; Elements of Comparison: Who is eligible? Non-Resident Indian (NRI): ; Person of Indian Origin (PIO): ; Overseas Citizen of India (OCI) Cardholder: Following categories of foreign nationals are eligible for registration as Overseas Citizen of India (OCI) Cardholder:- (i) Who was a citizen of India at the time of, or at any time after the commencement of the Constitution i.e. 26.01.1950; or (ii) who was eligible to become a citizen of India on 26.01.”
Why relevant

Provides comparison and eligibility context for Non-Resident Indian (NRI), Person of Indian Origin (PIO) and Overseas Citizen of India (OCI) categories.

How to extend

Use these definitions to determine which of these categories might qualify as 'citizens' or be separately allowed for NPS enrollment in 2017.

Indian Polity, M. Laxmikanth(7th ed.) > Chapter 7: Citizenship > D Registration of Overseas Citizen of India Cardholder > p. 68
Strength: 2/5
“The Central Government may register as an overseas citizen of India cardholder- (a) any person of fuB age and capacity,- (i) who is a citizen of another country, but was a citizen of India at the time of, or at any time after the commencement of the Constitution; or(ii) who is a citizen of another country, but -was eligible to become a citizen of India at the time of the commencement of the Constitution; or(iii) who is a citi7. But, a person, who or either of whose parents or grandparents or great grandparents is or had been a citizen of Pakistan, Bangladesh or such other country as the Central Government may specify, shall not be eligible for registration as an Overseas Citizen of India Cardholder.”
Why relevant

Specifies who may be registered as an Overseas Citizen of India (OCI) cardholder, clarifying citizenship-versus-registration distinctions.

How to extend

Combine with NPS citizenship language to assess whether OCI/PIO holders would be included or excluded by 'citizens of India' phrasing in scheme rules around 2017.

Statement analysis

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Statement analysis

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Statement analysis

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