Gautam Bhardwaj, Director of the Invest India Economic Foundation and one of the architects of the pension fund reform explains the current system. “Most of what we now have is a mix of things we either inherited from the British or put together just after Independence. Sixty years out, this has evolved into a fragmented, dysfunctional and unsustainable framework that (perhaps luckily) excludes almost everyone except civil servants and employees of large firms.” Moreover, as he adds: “Using a combination of a highly liberal view on pre-retirement withdrawals and a highly conservative and outdated view on investment policy, the system has succeeded at failing to deliver meaningful retirement incomes to most subscribers.”

The New Pension System (NPS) originally proposed in the OASIS (Old Age Social and Income Security) report (2000) represents an important break with traditional ideas about the organisation of pensions systems in India. Its growth and development is...