In a significant move to fortify India’s social security net and empower small businesses, the Union Cabinet chaired by Prime Minister Narendra Modi has approved the extension of the Atal Pension Yojana (APY) until the financial year 2030-31. Alongside this, a hefty Rs 5,000 crore equity infusion has been greenlit for the Small Industries Development Bank of India (SIDBI).
The decisions, announced after a key cabinet meeting in New Delhi, aim to provide lifelong financial security to vulnerable sections of society while ensuring affordable credit flows to micro, small, and medium enterprises (MSMEs). By prolonging APY, the government is committing to enhanced funding for promotion, awareness campaigns, and developmental activities. Crucially, gap funding will continue to sustain the scheme’s viability, broadening its reach to unorganized sector workers and low-income groups.
Launched on May 9, 2015, APY guarantees a monthly pension ranging from Rs 1,000 to Rs 5,000 post the age of 60, based on the subscriber’s contributions. Over 8.66 crore individuals have enrolled by January 19, 2026, cementing its role as a cornerstone of national social protection. Extending it aligns with the vision of a pensioned society, propelling India towards ‘Viksit Bharat 2047’.
On the economic front, the Rs 5,000 crore equity support to SIDBI will be disbursed in three phases: Rs 3,000 crore in FY 2025-26, followed by Rs 1,000 crore each in the next two years. This capital boost will strengthen SIDBI’s balance sheet, enabling it to extend cheaper loans to MSMEs amid rising risk-weighted assets from digital lending, unsecured loans, startup venture debt, and expanded financing.
Projections indicate that SIDBI-assisted MSMEs will surge from 76.26 lakh to 1.02 crore, benefiting 25.74 lakh new units. With each MSME employing about four people on average, this could generate 1.12 crore new jobs. Maintaining a robust Capital to Risk-Weighted Assets Ratio (CRAR) and credit rating will be pivotal as SIDBI scales up.
These twin initiatives underscore the government’s dual focus on inclusive growth: securing retirements for millions and fueling MSME expansion for employment and economic resilience. As India strides towards development goals, such measures promise a more equitable future.
