The world is ageing. Europe is doing so faster. Japan is at an advanced stage of a senior-dominated society. China is following Japan. India, in the next few years, will have a growing share in the population of senior citizens. Not only the elders, but the people in all age groups will also need to brace up for the uncertainties of life. The present must cover up for the future. The people must not be caught unprepared.
There is a clamour for ‘Old Age Pension’ scheme. There are attempts to negate all gains made by the pension reforms in the country. If the government can bear the burden of old-age financial needs, the beneficiaries would hardly be complaining. But that comes at a cost.
It’s the people who pay for the comforts of a few. The social security architecture in the country needs a relook. There is a plethora of options for the working population to roll out a corpus that will take care of their social security needs. Several schemes of the Central and state governments look after the social security concerns of the people. They all look to operate in silos. Yet, people lament that they are without social security.
If a senior citizen goes abroad on a visit, there is a requirement to buy health insurance. Existing instruments within the country are of no use outside it. So, a person going abroad will buy a fresh policy at a hefty premium, depending on the age profile. In a digital age and also at a time when businesses have made international borders redundant, it’s worthwhile to wonder why there cannot be a mechanism where the existing health policies are accepted globally and, if needed, a person may be asked to take up coverage enhancement.
Now that India is hosting the G20 meetings, the group of nations may explore the idea of respecting the existing social security concerns of the constituent countries.
The larger issue, though, is the silos for the social security needs of the people in the country. They must be demolished. Many today are working in the private space. The government workplace is shrinking. This is in accordance with the mantra of ‘minimum government, maximum governance’. The argument that the income tax base in the country is too small is valid. This small base may be taking measures for social security.
For them, the nudge principle works, as they save for their social security to save taxes. But even they will now have to think that the new tax regime gives them the option to walk an independent path and be the master of their own world. But the Goods and Services Tax (GST) covers most people, as they pay indirect taxes on things they buy.
The GST collection for January crossed Rs 1.5 lakh crore mark—the third time in the current financial year. The economic buoyancy may fatten the kitty. If a provision of the social security council on the lines of the GST and funded by a fixed percentage of the collections are made, there could be a starting point to envisage something concrete for a large number of people, who may be brought under the ambit of social security.
The states along with the Centre can become equal stakeholders in the social security council. Parliament may brainstorm over the scope and mandate of the entity, but the underlying objective must be to ensure that most of the people have a minimum threshold of social security, which should address their financial needs in old age, healthcare, shelter, education for children and food security.
Existing schemes may be subsumed in the pan-Indian social security architecture. This must be designed in a way that India is ready to meet the challenges of a large chunk of elderly population. Even the social empathy quotient may be enshrined in the architecture. The idea of a ‘time bank’—amount of time spent by people with elders accumulated to cash in on when they become old—can also be accommodated.
India is now at a stage where saturation of schemes (100 percent coverage) is being pushed. The next stage is social security for all.
Sumeet Bhasin
Director, Public Policy Research Centre
Twitter: @sumeetbhasin