New Delhi: The way forward for India’s pension ecosystem lies in a calibrated expansion of both contributory and non-contributory schemes, the Economic Survey 2025-26 said on Thursday, adding that engagement with state governments, cooperatives, farmer networks, and gig-platform companies can ensure last-mile reach.

The Pension Fund Regulatory Development Authority (PFRDA) has laid the groundwork for a vibrant pension system, offering a range of options for its users and covering a broad population bracket.

According to the Survey, India’s pension landscape features a multi-tiered system dominated by the market-linked National Pension System (NPS), government-backed Unified Pension Scheme (UPS) launched in 2025, and other schemes like the Employees’ Provident Fund (EPF) and the Atal Pension Yojana (APY) for broader coverage.

India’s regulatory bodies for insurance and pension — the Insurance Regulatory and Development Authority of India (IRDAI) and the PFRDA — have advanced reforms to deepen financial inclusion and extend protection to underserved segments.

“Studies highlight the need for better alignment between EPFO, PFRDA, and state-level pension bodies to reduce fragmentation, enhance portability, and streamline governance,” the Survey added.

There were 211.7 lakh subscribers to NPS and managed assets worth Rs 16.1 crore (as of December 31, 2025). Over the past decade, NPS subscribers have grown at a Compound Annual Growth Rate (CAGR) of 9.5 per cent, and the assets under management (AUM) have rapidly increased at a CAGR of 37.3 per cent.

“Similarly, since its inception in 2016, APY subscriptions have grown at a robust CAGR of 43.7 per cent, and AUM has shown exemplary growth at a CAGR of 64.5 per cent,” the Survey said.

However, it notes that persistent awareness gaps prevail, with low-income and rural households maintaining limited exposure to long-term retirement products.

Notably, recent efforts, such as simplified onboarding, NPS Lite variants, APY outreach campaigns, e-NPS, Digital KYC, flexible contribution structures and targeted products for minors, gig workers, and farmer groups, demonstrate the progress being made in closing these long-standing coverage gaps. The Survey suggested that expanding interoperability across NPS, APY and other schemes will support seamless portability as workers shift sectors or migrate.

“With sustained institutional strengthening, India is well-positioned to develop a pension system that is inclusive, future-ready, and anchored in global best practices,” it noted. The Survey further says that structural shifts are evident in the ‘non-life’ insurance segment, where health insurance accounts for 41 per cent of the GDP.

All 26 life insurers, 26 non-life insurers, seven health insurers, and two specialised insurers are active and supported by a network of more than 83 lakh distributors.

The Survey points out that the exemption in GST on life insurance and individual health insurance policies has provided substantial relief to policyholders and made insurance services more affordable.