Summary:

The National Pension System (NPS) in India has witnessed a substantial surge in assets under management (AUM), with the private sector playing a pivotal role in driving this growth. As of June 8, the overall NPS AUM stood at ₹12.28 lakh crore, reflecting a robust 28% increase year-on-year. Notably, the private sector’s NPS assets have seen an impressive growth of 39.02% to reach ₹2.42 lakh crore. This surge underscores the growing importance of the private segment within the NPS landscape.

Table of Contents:

  1. Private Sector’s Dominance in NPS Assets
  2. Subscriber Trends and Onboarding
  3. Pension Assets As % of GDP
  4. NPS Growth Journey

Private Sector’s Dominance in NPS Assets

The private sector has been a key driver behind the remarkable growth of NPS assets in recent years. The sector’s AUM reached ₹2.42 lakh crore as of June 8, marking a significant 39.02% increase from the previous year. This growth trajectory positions the private segment as a vital player in the NPS landscape.

Comparatively, the Government sector’s NPS assets under management stood at ₹9.43 lakh crore, reflecting a 25% year-on-year growth. Despite the private sector’s rapid expansion, the Government sector continues to hold a substantial share of NPS assets.

The number of private sector subscribers, including both Corporate and All-Citizen-Model categories, totaled 56.47 lakh as of June 8, representing an 18.53% increase from the previous year. Within the Corporate category, 20.13 lakh subscribers were registered, with approximately 15,900 companies participating in NPS. On the other hand, India boasts 93 lakh government sector subscribers in the NPS.

The share of the private sector in NPS AUM has notably increased, rising from 13.1% in March 2019 to 20% in March 2024. Similarly, the percentage of private subscribers in NPS rose from 21.6% in March 2019 to 37.5% in March 2024.

In the financial year 2023-24, a total of 9.47 lakh new subscribers, encompassing both government and private sectors, joined NPS. Of this number, 8.10 lakh subscribers opted for the ‘all-citizen model,’ while 1.37 lakh were Corporate employees. Additionally, as of June 9 this fiscal year, 1,47,901 new NPS and APY subscriber registrations were recorded.

Pension Assets As % of GDP

In India, pension assets as a percentage of GDP stand at approximately 16.5%, highlighting the sector’s significant potential for further growth. In contrast, developed countries like the UK, US, and Australia boast pension asset ratios exceeding 100%. Moreover, OECD countries reported an 81% ratio in 2022, while countries such as Denmark, the Netherlands, and Iceland surpassed 200% in 2021.

NPS Growth Journey

The NPS has experienced remarkable growth, surpassing the ₹10 lakh crore milestone in August of the previous year. Within nine months, NPS assets surged by ₹2 lakh crore, indicative of the system’s increasing popularity and trust among investors.

Notably, it took six years and six months post-implementation in 2009 for NPS to reach ₹1 lakh crore AUM. Subsequently, the AUM doubled to ₹5 lakh crore in four years and 11 months. The rapid growth continued as the AUM reached ₹10 lakh crore in just two years and ten months from the ₹5 lakh crore mark.

Overall, the NPS has seen a significant uptrend in assets and subscribers, signifying a positive trajectory for pension planning and investment options in India.

Publish Date: June 15, 2024