Planning For India's Retirement And Children's Education Goals Through InDIAS Scheme

India faces a unique set of social challenges, with citizens having to worry about saving not only for increasingly expensive children’s education, but also their own retirement. Budget 2026 raised two additional challenges—raise Rs 12.20 lakh crore for infrastructure; and issue a record Rs 17.20 lakh crore in gross market borrowings.

The private pension sector remains underdeveloped, with limited access to guaranteed retirement income to help individuals maintain their pre-retirement standard of living. The same challenges exist for saving for a child’s education. They demand innovation on the same lines as the Pension Fund Regulatory and Development Authority (PFRDA) slogan goes: innovation “zaruri hai”.

India also faces challenges in raising funds for infrastructure investments from foreign investors (given the currency depreciation), and needs to tap the growing pool of domestic savings for development.

Let’s discuss how a single, dual-use financial instrument called InDIAS (Inflation-linked, Deferred-Income, Annuity-like Securities) can address all four challenges and allow India to be a model for other countries to copy.

The Case For InDIAS

The brilliant concept suggested by PFRDA chairman S. Ramann, to allow National Pension System (NPS) vendors to create pension credits (PC), lends itself perfectly to InDIAS as a dual-use solution.

India’s Chief Economic Advisor Anantha Nageswaran, had at a Confederation of Indian Industries (CII) seminar in 2024, called for the development of long-term savings instruments, such as bonds. InDIAS leverages the concerns Anantha raised—that an equity market correction, without robust long-term savings vehicles, could cause long-term damage to the country’s savings and investment culture, and damage economic prospects.

Brazil implemented two innovations in 2023 to ensure retirement security and education funding, to good success. India could adopt/adapt the same in short order because it has many of the same favourable initial conditions, including a highly mobile-enabled society, talented government officials and a young population.

While US President Donald Trump’s tariff policies and statements on Greenland (and India) rocked equity markets in early 2026, holders of Brazil’s retirement and education bonds felt nil impact on their promised cash flows. This would be a boon to Indian financial markets, too, and can increase the overall stability of financing India’s debt through local savings, as opposed to being dependent on foreign investors.

The Savings Solution

For a child’s education, we need guaranteed income (indexed ideally to tuition-inflation) for four years when our child turns 18. For retirement, in order to maintain our pre-retirement lifestyle, we need guaranteed monthly income starting from say, 60 or 62, for 20 more years (average life expectancy in India). PFRDA’s PC concept is meant to ensure that NPS vendors can guarantee 3-5 years of real cash flows, starting in the future.

If we can think of retirement as nothing more than five consecutive, non-overlapping PCs, one can see how a single InDIAS innovation can have a dual use for retirement and education. Visualised alternatively, the retirement cash flows are the same as saving for five children’s educations, each five years apart.

The simple idea is for the government to issue a bond that pays nothing till some future start date (that can start from 1 year forward to as many as 30 years forward), for a period of say four years (average college window in India), and that too pays only Rs 10 per month as coupons. If an individual needed Rs 5,000 per month, considering today’s standard of living, to cover a child’s education, then their goal is distilled to just having to buying 500 of these bonds before their child starts college.

Similarly, if one needs the same amount per year to supplement NPS payments in retirement, then they can buy 500 InDIAS of the bond series that starts when they are 62, 66, 70, 74, and 78 years old. Buying the series of bonds is equal to buying an “individual defined benefit” (DB) pension (and vendors can offer various bundles depending on one’s potential life expectancy).

Those with no access to NPS or employer-based pension scheme will get access to an “individual DB pension”. More importantly, investors can track where they are relative to this goal during their lifecycle, and need to answer just two questions: target date of retirement (to buy the right bond with the right start date) and target supplemental income in today’s terms. The bond embeds the complex accumulation, decumulation, compounding and inflation-indexed calculations, and reflects it in the daily price.

It also potentially pressures to expand NPS because it is voluntarily funded and is liquid. So, if one needs funds for a child’s medical care or wedding, one can sell InDIAS immediately (and save more in the future), allowing decision flexibility.

The Brazil Example

Brazil launched RendA+ for retirement and Educa+ for education, on their Treasury Direct platform, allowing individuals to purchase these bonds off either the Internet or an app on their phone, directly from the government or through brokers, with the instruments listed on the B3 stock exchange, and in slices as small as $1/time period (fractional bonds). The transactions are enabled through Pix, a platform identical to India’s Unified Payments Interface (UPI). They issued multiple series with different cash flow start dates.

The purchases are voluntary, but since prices are quoted three times a day at B3, they are liquid and individuals can reverse or change their date of retirement/college start date or target supplemental income at will. They are also inheritable and require answers to two questions.

In addition, the Brazilian Treasury allowed individuals to buy these bonds through gift cards. So, employers or even family or friends can gift them to ensure guaranteed real retirement income.

As of December 2025, 365,000-plus individuals bought RendA+ bonds for a value exceeding R$9.20 billion ($1.8 billion); and 190,000-plus had purchased Educa+ for the equivalent of $400 million. RendA+ received the runner-up award at the Global Pension Summit in the Netherlands in 2023 and was a finalist in 2025!

The Indian Opportunity

A research by Nobel Laureate Robert Merton has shown that these bonds can be a terrific deal for the Indian government as they provide matched funding for green infrastructure investments and, if well-designed, could improve the country’s overall finances and create a long-term yield curve that can benefit other transactions like provision of mortgages.

InDIAS are simple, liquid, low-cost, low-risk, inheritable, ensure financial inclusion for the average Indian citizen (a tea vendor or a taxi driver or vegetable vendor), and they are a trivial innovation to launch.

All that the Indian government needs is a spark of creativity and a desire to innovate. In effect, InDIAS are “micro pensions” and “micro college savings”. They ensure financial inclusion, democratisation of household finance, and even gender equity. Innovation “Zaruri Hai”!

By Arun Muralidhar, Co-Founder, MCube Technologies