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Mainstream, VOL LI, No 15, March 30, 2013

Pension Parishad raises Hopes among the Elderly

Sunday 7 April 2013, by Bharat Dogra

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The efforts of the Pension Parishad during the last year have raised hopes among India’s elderly population in the unorganised sector that after long years of neglect they too can get some social security. So far in India a reasonable system of pensions has existed only for about 10 per cent of the population in the organised sector while the social security of the elderly in the remaining 90 per cent segment of the population has suffered from shocking neglect.

About a year-and-a-half back some widely acclaimed activists in the country like Baba Adhav, Aruna Roy and Nikhil Dey as well as organisations like the Hamal Panchayat and MKSS took the initiative to mobilise people on the demand of a satisfactory pension system for the 90 per cent people in the unorganised sector. This movement soon attracted a large number of social organisations and people. The response, whether in villages or cities, was very enthu-siastic.

This was fully evident in the mobilisation of a large number of people and organisations in Delhi from March 4 to 8 on the question of pensions and other leading demands of the unorganised sector. Even though the government did not make any specific announcement about enhanced budgetary resources, the negotiations held during this mobilisation with senior government representatives have opened the doors for some significant improvements in the next few months.

Another source of hope is that even as a part of its political strategy, the UPA Government may find it very useful to announce a significant improvement in the pension system before the elections scheduled for 2014.

The injustice of the existing system has been brought out by the Pension Parishad in the following words: “Currently, persons above 60 years get a pension of just Rs 200 per month, and those over 80 years get Rs 500 per month under the Indira Gandhi National Old Age Pension Scheme (IGNOAPS) overseen by the Union Ministry of Rural Development. This too is limited to persons Below the Poverty Line; which implies that only about one in every five persons over 60 years old receives old age pension.

“Further even after the additional budgetary spending by some of the States, the amount paid as pension to elderly people ranges from a maximum of 1000 rupees per month in Goa and Delhi to a paltry 200 rupees per month in States such as Andhra Pradesh, Bihar and Odisha.

“Employment-linked pensions are restricted to the elderly in the organised sector or to those who are among the rich and upper middle class categories. But groups that are most in need of old age pension are largely in the unorganised sector.”

In other words, in the unorganised sector (comprising 90 per cent of the population) only one-fifth of the elderly get pension and among these more than half get less than Rs 500 (even after adding the State Government contribution).

In place of the existing system the Pension Parishad has recommended the following system.

“Pension Parishad calls for a Universal and Non-Contributory Old Age Pension System to be established immediately by the government with a minimum amount of monthly pension not less than 50 per cent of minimum wage or Rs 2000 per month, whichever is higher. This system should necessarily incorporate the following elements:

• Any individual 55 years or older to be eligible for the old age pension; and, for women, the eligibility age for pensions to be 50 years.

• The monthly pension amount should be indexed to inflation bi-annually and revised every two to three years in the same manner as is done for salaries/pensions of government servants;

• No one to be forced to compulsorily retire from work on attaining the age of eligibility for universal old age pension.

• A single window system for Old Age Pensions; and

• The APL / BPL criteria should not be used for exclusion. Individuals whose income is higher than the threshold level for payment of income tax and Individuals who are receiving pension from any other sources that exceeds the pension amount under the proposed Universal Old Age Pension System could be excluded from this system.”

This is not just desirable but also doable, as is evident from the examples of several countries cited by the Pension Parishad.

“There are several low and middle income countries that have instituted universal or near universal non-contributory old age pension system. Bolivia: per capita GDP about 40 per cent higher than in India. Pension about Indian Rupees 1500 per month. Lesotho: per capita GDP about two-third that of India, Pension about INR 2300 per month. Kenya: per capita GDP about half of India, Pension over INR 1250 per month. Nepal: per capita GDP about one-third that of India, Pension INR 313 rupees per month.”

The Parishad has given detailed suggestions on how the necessary resources to implement this pension reform can be raised. Also, it has emphasised that this is not a ‘justice vs growth’ issue, as placing additional purchasing capacity in the hands of elderly people and poor families will have a multiplier impact on stimulating economic activity in small scale, labour-intensive enterprises thereby encouraging broad-based growth in the economy.

The author is a free-lance journalist who has been involved with several social initiatives and movements.

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