I believe it is my job to analyse the budget from an investment perspective.

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With that in mind, I can safely say I’m happy with the Union budget for the next financial year. For me, three things stand out: the expansion of tax slabs, the new infrastructure tax break and the New Pension System (NPS) initiative.

The finance minister has unveiled an innovative way to attract more people towards the NPS. Every NPS account holder, who opens his account after April 1, 2010 and deposits less than Rs 12,000 a year will be given a gift by the government in the form of an extra Rs 1,000 added to the account for three consecutive years.

Now, you can imagine how beneficial this Rs 3,000 will be for someone who can’t even save more than Rs 1,000 a month. This amount is a big one, especially when it grows manifold in his account. That is why I believe this initiative is truly brilliant. The finance minister said in his speech that he expects to add 10 lakh new NPS members with the help of this gift.

This means an expenditure of Rs 100 crore a year. It will be really great if this projection comes true. I have always advocated the NPS as an ideal way for small savers to attain financial security on retirement. However, the NPS has found very few takers. There are no commission-earning agents selling the NPS. Hence, few people are aware of it.

The NPS needed a push and instead of spending a lot of money on advertising and marketing, the government has decided to give that money back to the account holders. But will that be enough to get more people into the NPS? I am a bit sceptical about that.

This initiative will certainly create a lot of buzz and word-of-the-mouth awareness will increase, that’s for sure. But I still think the majority of new NPS subscribers will be the ones who have voluntarily become a part of this scheme.

To find new subscribers, more effort will be required. A mandatory framework or a heavy marketing push may still be needed. And something makes me feel that there is more of the NPS to come. This initiative, albeit a remarkable one, may still not be enough. I believe a number of other things will be tried as well. And everything will be worth it if it gets more people to the NPS.