New Delhi: Finance Minister Nirmala Sitharaman on Tuesday strongly reacted to Congress leader Jairam Ramesh’s criticism of the government's Atal Pension Yojana (APY).

Reacting to Jairam Ramesh’s "poorly-designed" scheme remark, Sitharaman said that the APY is a subsidized program aimed at assisting the economically disadvantaged and the lower middle class.

She referenced a sample study conducted by the Indian Council of Social Science Research (ICSSR), which revealed that a large portion of the pension accounts under the scheme belonged to people in lower income brackets.

“As regards the majority of pension accounts being in the lower slabs, for a subsidised scheme intended for the poor and lower middle class, this is obvious. In fact, it shows the proper targeting of the scheme. If the offtake was at the higher end, that would be surprising!” said Sitharaman in a post on social media platform X.

She said Jairam Ramesh was either “being malicious” or was “ignorant of the basic tenets of designing a good pension scheme”.

Explaining the logic behind the flagship social security scheme, Sitharaman said, “Atal Pension Yojana is designed based on best practice choice architecture to automatically continue the premium payment unless the subscriber opts out.”

“This is a deliberate and beneficial feature which is in the best interest of the subscribers. Instead of requiring people to decide each year to continue, they have to take a decision to discontinue. This makes many of them take the right decision and save for their retirement.”

She went on to say that Jairam Ramesh has “not bothered to check facts” as he called it a fixed income scheme.

“The minimum return under the APY is guaranteed by the GoI to be at least 8%, regardless of prevailing interest rates and returns. This is an attractive guaranteed minimum return. GoI pays a subsidy to PFRDA to make up for any shortfall in actual returns,” Sitharaman said.

“If higher investment returns are received on the contributions of subscribers of APY, higher pension would be paid to the subscribers: In fact, currently the returns are more than 8%,” she added.

“Hoodwinking is what Congress does always— in the name of vote bank politics or minority appeasement,” said Sitharaman in response to Jairam Ramesh’s charge that people were being hoodwinked and coerced into participating in the scheme.

“The elitist mindset of the dynasty and its minions who are constantly thinking of people in the higher echelons of society, perhaps, blinds them to this obvious truth,” Sitharaman said.

“The Congress prefers that poor should not have pensions so that they are forced to rely on government hand-outs which keeps them dependant on dynasty politicians,” she added.