In India, there are estimated to be about 11 crore senior citizens in the age group of 60 years and above of whom about eight crore have no old age security or pension, five crore sleep hungry, three crore live alone and one crore are going blind with no means to afford treatment. Also, as women live longer than men, there are a large number of female widows. In fact, 90 per cent of the elderly have to continue to work to eat because they have no alternative source for survival. Financial security is a major concern for the elderly as more than two-thirds of them live below the poverty line. And, the elderly population is expected to increase to 20 crore by 2030 and 31 crore by 2050.
The Central government has been initiating certain measures from time to time to help the elderly. Of them, the most important one was the Indira Gandhi National Old Age pension scheme, which was launched in 1995, offering between `200 and `500 per month depending on the age profile of the beneficiary. The National Pension Scheme — Swavalamban, a contributory pension scheme — was also initiated by the Union government in 2003. In May 2015, Prime Minister Narendra Modi announced a series of schemes for social security to enhance the welfare of the citizens, especially in the unorganised sector.
These schemes are Pradhan Mantri Suraksha Bima Yojana, an ultra-low cost accident insurance scheme; Pradhan Mantri Jeevan Jyoti Bima Yojana, a life insurance scheme; and Atal Pension Yojana, a traditional pension scheme. All the three schemes are contributory in nature and require a bank account to be operational. Various field studies show that despite efforts by the government to open new bank accounts, a large number of women either do not have financial resources or a bank account and are therefore not able to take advantage of the Atal Pension Yojana. Also, the amount of subscription is substantial for a large segment of the population.
Most importantly, as the Yojana is only applicable to people less than 40 years of age, nearly 30 per cent of the population in the country which is above 40 years is excluded from the scheme. Therefore, there is a need to have another look at the old age pension schemes in India. According to studies on ageing, social security helps in increasing longevity, which in turn increases growth. Absence of social security is a major factor of poverty at old age as well as low aggregate demand in the economy. In view of the economic impact of ageing, the government needs to consider out-of-the-box solutions. Universal pension scheme, which assures a minimum pension to the elderly in the country, could be one alternative to smoothen consumption and address poverty related issues.
A number of countries like Nepal, New Zealand, Mauritius, Mexico and Sweden offer universal pension to resident citizens. India could also consider a universal pension of `500 per month which would amount to about `66,000 crore annually, assuming that 11 crore elderly live in India. This amount is nearly one-fourths of the food subsidy, one-ninths of annual interest payment and one-thirteenths of gross fiscal deficit, which India can certainly afford.
As the elderly are generally responsible and therefore, serve as an anchor for the family, universal old age pension can ensure supplementing resources of the family in the most meaningful way without money being squandered in wasteful expenditure. Just providing pension probably is not the Indian way of taking care of its elderly. It would be desirable that the elderly, who have spent a life time nurturing the young, are provided with better old age benefits.
The traditional western-style old age homes, generally in isolation, do not probably meet the Indian ethical values, given the story of Shravana and his elderly parents on a pilgrimage. Therefore, old age homes in India can be established in the vicinity of schools and colleges, where the elderly can be engaged with children till their last breath contributing to posterity and helping children understand the value system of Indian culture. To enhance self-esteem of elderly people, it is important to provide them with dignified support and opportunities. In countries like the USA, elderly are actively engaged on honorary basis at places of tourist attraction, art centres and theatres as also in many international institutions like the World Bank. Similarly, many elderly in India, given their experience, can be employed on consultancy basis in the judiciary, internal security, educational institutions, museums, theatres and tourist places as well as religious places to communicate with the visitors.
In view of various factors, many elderly are not able to, physically and financially, afford a good meal or medical treatment. The government could consider instituting an old age meal scheme and old age medical scheme for the elderly. To successfully launch and monitor such schemes, participation of local bodies would be essential. The help and support of private sector, probably, through the corporate social responsibility, could also be explored.
The rising number of elderly in the country also implies that special products/medical gadgets and entertainment programmes would be necessary to engage them. It is not sufficient to have a few religious channels on TV and presume that the elderly can be kept engaged in a fruitful manner. This is not caring for the elderly in their sunset years. Finally, there is a need to consider setting up think-tanks to focus on medical, sociological and economic needs of the growing elderly population. The field of geriatrics is still in its infancy in India, despite the country having 11 crore elderly.
The elderly have priceless knowledge and sterling experience to share as epitomized by legendary Bhisma Pitamah. Therefore, the abundant resource available in India in terms of the elderly population should not be treated as waste management but as wealth management. In a country like India, it should be considered normal that the elderly should be able to retire with a degree of personal comfort without worry and with dignity. This at least, elderly citizens can expect in Bharat, the land of the late King Dasharata.
The author is RBI Chair Professor of Economics,IIM-Bangalore.
Email: charansingh@iimb.ernet.in