Key Points
- October-November 2024 market decline lowered NPS equity returns to 26.6% from 40% in September.
- NPS total assets increased to ₹13.55 lakh crore as of November 30, 2024.
- Private sector NPS growth outpaced the government sector, with a 37% growth rate.
- The number of private sector subscribers rose by 21.5% year-on-year.
- Government sector NPS assets stood at ₹10.37 lakh crore by November 30, 2024.
Looma News
The recent slide in the equity markets during October and November 2024 has significantly impacted the performance of NPS equity schemes. As of November 30, the average annual return for equity investments in NPS stood at 26.6%, a marked decline from the 40% return seen on September 28. This drop followed a sharp fall of over 8% in both Sensex and Nifty50 indices from their September highs. Nifty50, which peaked at 26,277.35 points on September 27, lost 2,150 points by the end of November, largely due to weak Q2 corporate earnings and substantial Foreign Portfolio Investment (FPI) outflows, partly driven by the “Trump Trade” amid rising U.S. yields.
Despite these market challenges, the total assets under management (AUM) for NPS grew to ₹13.55 lakh crore by November 30, up from ₹13.46 lakh crore on November 10. On a year-on-year basis, NPS assets have shown impressive growth of 28.26%, although this is a slight slowdown from the 32% growth observed in September. The Nifty50 saw its worst monthly performance in October 2024, declining 6.2%, while BSE Sensex fell by 5.83%.
Even with the dip in equity returns, NPS equity schemes continue to outperform other government-backed schemes. For instance, the central government’s scheme delivered a return of 12.55%, while the state government scheme returned 12.63%. In comparison, the average return from NPS equity schemes was much higher. Over the past year, equity-based NPS investments delivered returns as high as 40%, underscoring the potential of the scheme in buoyant market conditions.
Growth in NPS Assets
Private sector NPS assets continued their robust growth, rising 37.67% year-on-year to ₹2.71 lakh crore by November 30, 2024. This growth outpaced the government sector’s 27% increase. The number of subscribers in the private sector has also risen significantly, with a 21.51% year-on-year increase, bringing the total number of subscribers in this sector to 61.2 lakh. This growing interest in NPS among private sector employees highlights the scheme’s increasing appeal as a retirement savings tool, offering flexibility, cost-effectiveness, and tax benefits.
The government sector’s NPS assets reached ₹10.37 lakh crore by November 30, 2024, up from ₹10.23 lakh crore at the end of September. Meanwhile, the corporate sector-related NPS has also seen strong growth, with assets reaching ₹2.02 lakh crore as of November 30, compared to ₹1.46 lakh crore at the same time last year. The ‘All Citizen Model’, which allows individual participation, stood at ₹68,795 crore. Corporate sector subscribers numbered 21.92 lakh, while the All Citizen Model had 39.28 lakh subscribers, further emphasizing the growing popularity of NPS.
