Cabinet boosts social security: Extends Atal Pension Yojana, injects ₹5,000 crore into SIDBI for MSME growth
New Delhi (The Uttam Hindu): The Union Cabinet, chaired by Prime Minister Narendra Modi, took two important decisions regarding social security and the MSME sector. The Cabinet approved the continuation of the Atal Pension Yojana (APY) until the financial year 2030-31, while also deciding to provide equity support of ₹5,000 crore to the Small Industries Development Bank of India (SIDBI). Both these steps aim to provide social security to vulnerable sections of the country and access affordable loans to small industries.
The Cabinet approved the continuation of the Atal Pension Yojana (APY) until 2030-31, as well as increased funding support for promotional, awareness, and development activities. It also decided to continue providing gap funding necessary to ensure long-term sustainability of the scheme. This will further expand the scheme's reach to unorganized sector workers and low-income individuals.
The Atal Pension Yojana (APY) was launched on May 9, 2015, to provide financial security to unorganized sector workers in their old age. Under this scheme, a guaranteed pension of ₹1,000 to ₹5,000 per month is provided after the age of 60, depending on the individual's contribution. As of January 19, 2026, more than 86.6 million people have joined the scheme, making it a strong link in the country's social security system.
The government believes that taking the scheme forward will help India become a pension-based society and also strengthen the goal of 'Developed India 2047'.
Additionally, the Cabinet approved ₹5,000 crore equity support to SIDBI to provide relief to the MSME sector. This amount will be disbursed through the Department of Financial Services in three tranches: ₹3,000 crore in 2025-26, and ₹1,000 crore each in 2026-27 and 2027-28. This infusion will enable SIDBI to strengthen its financial position and provide greater access to affordable credit to MSMEs.
According to the government, with this equity infusion, the number of MSMEs receiving financial assistance from SIDBI could increase from 76.26 lakh to 1.02 crore. This means that approximately 25.74 lakh new MSMEs will directly benefit. Based on current data, this is expected to create approximately 1.12 crore new jobs, as on average, each MSME employs approximately 4 people.
The government stated that risk-weighted assets on SIDBI's balance sheet are expected to increase in the coming years as the bank focuses on digital and unsecured lending, venture debt to startups, and increased financing for MSMEs. A strong capital base is essential to ensure SIDBI's capital-to-risk-weighted assets ratio (CRAR) remains strong and its credit rating secure.
The expansion of the Atal Pension Scheme will provide financial security for millions of people in their old age, while the equity support provided to SIDBI will provide affordable loans, increased employment, and robust growth for the MSME sector. Both these decisions are considered crucial in strengthening and strengthening the country's economy.