I do not like NPS, as I think it is a technically flawed product. What is the technical flaw? It is a GOI product and to me that is too risky.

I am happy to stay with one GOI product named PPF, so why should I choose one more?

Good question.

However if I have a huge income and the willingness to put away another Rs. 50k a year maybe I should look at it.

Personally, I DO NOT HAVE A NPS ACCOUNT, and this happened after I did some work with some of the people working there. You could of course call it information bias….

I do not like the small portion in equities for the youngsters (age 22 to age 50), I do not like a compulsory annuity (I will accumulate outside for buying annuity, why through Nps?), I know i will get a sub optimal taxable pension. Why should I pay tax on a pension amount when I can withdraw from an equity fund?

Here are 2 articles one by msm saying ‘you should invest in NPS and another article saying you should not invest. That article is of course by Pattu!!


and here is Pattu’s post


another brilliant friend


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  1. Should you invest in NPS? NO


    providing income tax relief via NPS is a red flag. Done primarily to lure large middle class to boost the NPS corpus with tax sops.

    again why redflag?

    simple math: 50k * 35 million tax payers = roughly 1 trillion INR into the NPS ripe for anybody’s taking

    quote1: Indian government unveiled plans on Thursday to invest $137 billion in its decrepit rail network over the next five years

    quote2: Prabhu,… said he would raise funds from …pension funds!

    caveat emptor

  2. “It is a GOI product and to me that is too risky.”

    Can you please elaborate on why you consider a GOI product as too risky? Shouldn’t it be the other way round where there is more trust on a GOI product?

  3. @krod,

    It is because GoI is an irresponsible promoter as well as an irresponsible handler of public money (using it for giving freebies instead of creating sustainable investments).

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