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As India ages, over 61% of elderly will have no income security by 2050

New Delhi, June 14 

India's 860 million-strong working population (15-64 years), the world's largest, is beginning to age. Over the next 33 years, by 2050, 32.4 million Indians, or 20 per cent of the population, will be above 60 years of age. If pension continues to cover only 35 per cent of senior citizens as it does today, 20 million, or 61.7 per cent of India's elderly population, will be without any income security by 2050.

The Centre pays Rs 200 per month under the Indira Gandhi National Old Age Pension Scheme (IGNOAPS) to every Indian over the age of 60 and living under the poverty line (the ability to spend Rs 33 per day in urban and Rs 27 per day in rural areas as per the Tendulkar committee on poverty line). The states are encouraged to add to this sum and are free to expand the coverage. Currently, states pay anything between Rs 200 and Rs 2,000 as public pensions. Should public pensions be universal or targeted? What should be the minimum offered by a public, non-contributory pension? From which age should it be granted? To find answers to these questions through opinions of older people, a study was conducted in Gujarat and Rajasthan by the Centre for Equity Studies (CES), New Delhi, in August-November 2016. The study, yet unpublished, collected opinions and experiences of 1,505 people above the age of 55 years across 14 locations. The states were chosen because they represent two ends of the spectrum in the universalisation debate: Gujarat, 10th richest state in per capita GDP ranking, offers a targeted pension of Rs 400 only to the poor at the time the study was conducted (since then the amount has been revised to Rs 500), and Rajasthan, 23rd in the per capita GDP list, extends Rs 500 to (nearly) all senior citizens. The study found a wide and conclusive gap between pension policy and public opinion. Opinion across both states was unanimous that public pension should be extended to all elderly and should be initiated earlier than at age 60 years. The popular view was that Rs 2,000 was an adequate pension sum, which is four to six times higher than their present entitlement.

Gujarat pursues a narrowly targeted scheme whereby only the poorest senior citizens are entitled to public pensions. Rajasthan has near-universalised pension entitlements whereby women above 55 and men above 58 receive pensions as long as they are not entitled to pensions from any other source or are not taxpayers. Arguments against universalisation suggest that the cost of universalisation is generally lowering the entitlement for those who need it the most. 

 

Targeting allows for public funds to be utilised for those who need them the most. On the other end of the spectrum are arguments which propose that universalisation strengthens the moral-politico claim and the delivery of the public good or service.

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