LIC VJBY – How Indian govt policy goes wrong

LIC VJBY or Varishta Pension Bima Yojana from LIC was a policy that was introduced at the fag end of the BJP govt and abandoned by the next Congress govt for its version the SCSS.

VJBY was a good scheme for senior citizens, which gave them a decent alternative somewhat a lifelong guarantee pension. The main pitfall was that it was not inflation indexed and had a long lockin of 10 years. There was a promise of low inflation and a govt that would  not debase the currency.

The scheme was virtually abandoned and many senior citizens who joined the scheme suffer poor service from LIC , be it in terms of the mundane change in bank mandate or non receipt of credit of pension.

Worse the current UPA Congress govt has debased currency, ratcheted up inflation with its loose monetary policy,  subsidy program, kisan loan maafi and mgnrega , and  kept interest rates negative for the last 2 yrs.

Net result Senior Citizens are getting upto 10.5 % on a long term fd. While they can exit an SCSS with a penalty they are stuck in a VJBY for a decade.

This just shows how Caveat Emptor still holds good, while dealing with the government.

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