A report, released on October 1, by the United Nations Population Fund (UNFPA) says that India's senior citizen opulation will be overwhelmingly female by 2050 — women will outnumber men in the 60 years plus category for age. We explored the plans India should be making for its aging and aged to give them a sense of security in their twilight years. We are bringing back our June 1-15, 2012 cover story in view of the UNFPA report released today as we think it is timely and contextual as women in or country, as elsewhere, are a vulnerbale group. Read on.

“The demographic profile depicts that in the years 2000-2050, the overall population in India will grow by 55% whereas population of the people in their 60 years and above will increase by 326% and those in the age group of 80+ by 700%—the fastest growing group.
“One-eighth of the world’s elderly population lives in India. Most of them will never retire in the usual sense of the term and will continue to work as long as physically possible. Inevitably, though, the ability to produce and earn will decline with age. The absence of savings will result in sharp decline in living standards that for many can mean destitution. Therefore this is the challenge of old age income security in India.
“As a result of the current ageing scenario, there is need for all aspects of care for the oldest old (80+ years) namely, socio-economic, financial, health and shelter.”
This statement, taken from the preamble of the draft National Policy on Senior Citizens 2011, goes on to say that the population of people in their 60s will swell up from 7.6 crore in 2000 to 32.4 crore in 2050 (as against the total population projection of 157 crore) and that of those in their 80s from 0.6 crore in 2000 to 4.8 crore in 2050.
Apparently, this means India’s largest young workforce that has put its economy on steroids today, will be tomorrow’s biggest socio-economic challenge, a ticking time bomb. Already the rapidly changing socio-economic environment — emergence of nuclear families, increasing migration of younger members in pursuit of employment and changing fertility patterns—is wreaking havoc in the lives of the elderly who are forced to live on their own mostly without physical or financial support from their wards. Apart from anecdotal evidence and complaints of abandonment received by the government, there are surveys, too, conducted by civil society groups like HelpAge India and others, that show how the elders are finding it increasingly difficult to live with dignity.
As it is, we have a very sorry and creaky social security system to deal with the 10 crore-strong senior citizens population (as per current official estimate). Now, that number is set to multiply manifold to 32.4 crore in 2050. That might seem like a problem too far away to worry about, so let’s look at it like this. A population of 32.4 crore old people will be more than the present population of USA (which is 31.3 crore as on March 31, 2012). It will be beyond the economic, intellectual and physical might of any country to deal with such a huge problem. The only way to deal with such a problem is to not let it become a problem. By anticipating and preparing for it while there is still time on hand.
That time is now, as the Pension Parishad organised in New Delhi in May so eloquently highlighted. For five days, hundreds of senior citizens from across India assembled at Jantar Mantar to bring this issue, normally on the periphery of New Delhi’s policy wonks and policymakers’ scheme of things, to national centre-stage. We are justifiably proud of our ‘demographic dividend’ (the working age—15 to 59 years—population is likely to grow to 64 percent of the population by 2021). We are reaping the benefits of this socio-economic reality. But it is also a reality that a few years thereafter, large numbers of this workforce will start joining the ranks of the senior citizens, debilitated economically and physically. Given that 94 percent of our present workforce (that translates to 43 crore) is in the unorganised sector with no post-retirement security like provident fund (PF), pension and gratuity, this “avalanche of the aged” will hit us hard if we don’t take pre-emptive steps.
Currently, we are able to take care of only 1.9 crore of the 10 crore elderly by way of paltry pension and other facilities. Both government officials and civil society groups dealing with the subject confirm that a “huge” population of needy elders is left out.

MINDLESS APPROACH
If the current efforts at looking after our senior population are patchy, that of planning for the future is pathetic. For example, the draft National Policy on Senior Citizens of 2011 mentioned at the beginning. It was supposed to be an ‘improvement’ upon the National Policy on Older Persons of 1999. The earlier policy marked the 60+ age group for providing a social security net in the form of old age pension etc. The 2011 policy hints at a shift of focus towards 80+, as the last line of the preamble indicates, though it continues to hold that “all those of 60 years and above are senior citizens” and be cared for. But why this hint of a shift in focus towards those in 80s?
A senior official of the social welfare ministry, whose baby the policy is, explains: “This (hint) points to the current thinking in the government that those in the 60+ age group can engage in productive work and earn their living. Hence, we have proposed that the 12th five-year plan should provide for setting up an ‘economic bureau’ dedicated to finding employment opportunities for them”. The planning commission is yet to respond to this proposal.
The way to hell they say is paved with good intentions, wonder why they left out clever ploys dressed up as caring policies. Let’s follow the path to the policy hell laid out by the social ministry:
HellPath 1:
The assumption that the 60+ can engage in productive work. It could be true of the urban, organised and skilled workforce where experience and mental agility make it possible for them to remain productively employed and competitive. But for the urban and rural unorganised workforce engaged mostly in physical labour, their best years are behind them and their chances of competing with a younger workforce diminish by the day.
 
HellPath 2:
Ninety-four percent of India’s workforce is in the unorganised sector. At present, that translates into 43 crore in the unorganised sector versus just about 3 crore in the organised sector. So, even if the grand plan to re-employ the retirees is a 100 percent hit, it will mean jobs for the 6 percent while the more needy 94 percent are left to their own means. Which is what obtains even now. So, by a deft sleight of hand, the ministry wants to set up a ‘bureau’ to take care of an exisiting social problem – that is set to grow – and be done with it.
 
HellPath 3:
On to the proposal for setting up an ‘economic bureau’ for finding employment opportunities for the aged, even if that seems like a contradiction in terms. In a country where the waiting list of educated unemployed youth at our employment exchanges is close to 3 crore (it was 2.7 crore in 2008), and where unemployment is rising at 9.4 percent, or close to 4 crore, (as per the labour ministry’s survey of 2009-10), what are the chances that an employment bureau for the retired will thrive?
Fortunately, the planning commission is yet to respond to the ministry’s proposal and the National Policy on Senior Citizens 2011 is still a draft, yet to be accepted and adopted by the government (the states are yet to respond). Hopefully, the segregation of the aged into the 60+ and 80+ will be junked.
It is not that governments are completely insensitive to the challenges of the aged. Central and state governments do a very decent job of providing a social security to their ex-employees through pension and healthcare schemes. Though this takes care of less than 6 percent of country’s workforce that superannuates from formal employment, pension bills of governments are bulging beyond manageable levels. Pension accounts for nearly 40 percent of the salary bill of the central government employees, which runs into more than Rs63,000 crore (in the current budget).
Tough as it is, governments will have to look at extending this social security to the unorganised sector, which obviously needs more protection than the other organised group. Of course, even today, there is no dearth of social welfare and security schemes. There are so many of them for pension, housing, healthcare, food, disability and so on. But these are primarily for BPL families. The last BPL survey was done in 2002, so calculate the inclusion-exclusion errors in addition to the existing inclusion-exclusion errors in the 2002 list. Then remember that only a family surviving on '32 a day in urban areas or '26 in rural areas is counted as BPL. Let’s ignore these factors and see how various welfare schemes are governed.
Take the case of the Unorganised Workers’ Social Security Act of 2008. This is an extraordinary piece of legislation, which provides only for setting up ‘social security boards’ at the centre and state levels to govern existing schemes. These boards may recommend a fresh scheme, though nothing has come to notice so far. Some of the states haven’t bothered to set up the boards and the one at the national level has merely tinkered in one scheme by expanding the coverage.
Here is a shocker. This law governs 10 central schemes (as listed in schedule 1), of which only one, Rashtriya Swasthya Bima Yojna (RSBY), comes under the very ministry that enforces the law—the ministry of labour and employment. The rest come under five different ministries—of rural development, health and family welfare, textile, agriculture and finance. Guess what the labour ministry can do about these schemes. By the way, the list doesn’t include the social welfare and empowerment ministry-run Integrated Programme for Older Persons (IPOP), which funds NGOs taking care of the old.
There is another law—the Maintenance and Welfare of Parents and Senior Citizens Act of 2007—which seeks to make children and relatives provide for senior citizens they have abandoned. This is administered by the social welfare and empowerment ministry. The law provides for setting up tribunals to award maintenance. Some states have complied, others not (UP, Meghalaya, Sikkim). So far, less than 3,000 complaints have been registered, which the officials themselves describe as “very low” and “disappointing”, because the complaints to the ministry, instead of that to the tribunals, keep growing.
Take pension schemes for the old. There are two—one run by the rural development ministry, Indira Gandhi National Old Age Pension Scheme (IGNOAPS), and the other by the finance ministry, NPS-Lite (or Swavalamban). In IGNOAPS, the centre gives Rs200 a month to 60-year-olds and above (Rs500 for 80 years or above) from the BPL families. Rural development minister Jairam Ramesh described it as an “insult to the dignity of the individual” in his recent letter to the prime minister while endorsing the demand of the ‘Pension Parishad’ led by Baba Adhav, Aruna Roy and others to expand the scope of pension beyond BPL families and raise the amount.
True, the states also add their bit—ranging from Rs50 to Rs800, with Goa scaling it up to Rs1,800 in the current budget. The total number of IGNOAPS beneficiaries comes to 1.9 crore, as against the total population of 60+ at 10 crore. Ramesh argued in his letter that by following ‘exclusion criteria’, the number of beneficiaries can be doubled to 4 crore and the burden on exchequer will be another Rs8,000 crore. The PM hasn’t responded. There are implementation and structural deficiency issues too.
Mathew Cherian, executive director of the Helpage India, which works to improve the lot of the elders, says not only many deserving persons are not getting pension, payment is highly erratic in states like UP, Bihar, Odisha, Jharkhand, Chhattisgarh and MP. Ramesh too has pointed out (in his letter to PM) how “except in one or two states, pensioners do not get monthly payments but get payments bunched once every few months”.
In NPS-Lite, introduced in 2010, the finance ministry gives Rs1,000 per year for four years towards a pension fund if an individual contributes Rs1,000 – Rs12,000 a year. It is open to the employees of central and state governments, corporations, as well as to individuals from the unorganised sector and economically disadvantage sections. As on February 2012, only 5 lakh people have registered for the scheme. Assuming that all of them are from the unorganised/disadvantaged groups, it is still only 5 lakh of 43 crore or more needing the financial help.
The government officials have already declared it as a big failure. “How do you expect the poor to contribute Rs1,000? This condition has to be waived to make it work. A majority of the unorganised sector workers come under BPL,” says a senior official.
 
What needs to be done
A beginning has to be made with the ‘draft’ national policy on senior citizens, shifting the focus back to the 60+ age group. Finding employment opportunities for them (in panchayats, municipalities and other bodies) is fine but the social and financial security network should begin at 60, and not wait until 80. Top political leaders (Pranab Mukherjee, Sonia Gandhi et al) agreed to this when members of the Pension Parishad met them recently and therefore it should not be difficult.
The second step should be to club various welfare measures and pension plans under one department or commission, consisting of officials from various ministries and public spirited individuals. There is a sound logic for this.
Consider the old age pension plan, IGNOAPS. What is the logic of asking the rural development ministry to run it? None, except that a scheme has to be run by some ministry. “You are right, it has nothing to do with us,” commented a ministry official, explaining that the fund goes directly from the finance ministry to the state plan as ‘additional central assistance’, as it is not a centrally sponsored scheme. Therefore, guess what stake does the rural development ministry has to make it a success. The same goes for the states. The programme is handled by different departments in different states—revenue (Tamil Nadu, Karnataka), rural development (Andhra Pradesh, West Bengal, Assam, Meghalaya), women and child (Odisha), labour (Jharkhand) and social welfare (most other states). This reflects both lack of clarity and sincerity. Old age pension is seen more as a token of the state’s benevolence, which needs to be corrected.
The social welfare ministry had proposed a ‘senior citizens’ commission’ dedicated to their welfare and a contingency fund in the 12th plan. The planning commission rejected it, without assigning any reason. The decision must be revisited. A dozen or more ministries are running several dozens of welfare schemes like the blind men trying to figure out an elephant in the parable. Coherence and coordination are lacking and so are the responsibilities and accountability. More so in the case of senior citizens.
The third, and most crucial, point is to recognise that old age pension is a universal need. The unorganised sector comprises 94 percent of our workforce without any post-retirement security. Besides, there are small and marginal farmers who comprise a majority of the farming community and other disadvantaged groups. Therefore, as Pension Parishad has advocated, and Ramesh supports it in his letter to the PM, the APL-BPL criteria should go and only the exclusion criteria (to keep the creamy layer out) be used to cover the needy individuals.
Once this is realised, suitable policy initiatives can be taken. Prof Moneer Alam, an expert on social security for the old who teaches at Delhi University’s Institute of Economic Growth, says the World Bank recommends a three-tier formulation: (a) government pension scheme, (b) contributory scheme in which both employee and employer contribute to a pension fund and (c) private insurance/financial schemes. The government may provide a smaller pension sum but not so low as Rs200 a month—nearly one-fourth of the lowly poverty line and less than one-tenth of minimum wages.
We have all of these, but as we are at a nascent stage (the pension scheme started in 1995 when Rs75 a month was given only to the destitute; the old age pension of Rs200 a month started only in 2006), the total coverage is a miniscule part of the population. As pointed out earlier, NPS-Lite, a contributory plan, is a total failure and is restricted to the unorganised sector. It needs reworking. Similarly, private insurance/financial institutions should play a bigger role.
But (b) and (c) will take off only when the government demonstrates that it is clear what it wants done and that it cares for the senior citizens. For this, the lowly Rs200 a month pension has to be revised upward. By how much is a matter of debate. But it is needed and for that sufficient funds can be generated.
Nikhil Dey, one of the key members of Pension Parishad, points out how the Maharashtra government generated resources for its employment guarantee scheme in 1972. It levied four minor but dedicated taxes—professional tax, surcharge on sales tax, transport tax on bus tickets and vehicle registrations, and tax on farmers owning more than 10 acres of irrigated land. Even today, he says, the state is left with Rs3,000 crore in this account now that MNREGS has replaced the state scheme and is being funded by the union government.
Dey also says that pension can come from the industry too, at least those doing very well like IT, jewellery and other service sector companies. These industries have greatly benefited from economic liberalisation but have contributed little to social security.
Prof Alam suggests several other changes. The subsidy structure should be changed to ensure the rich and SUV owners and rich farmers don’t corner a substantial part of subsidised diesel and fertilisers. The tax base can be expanded to include rich farmers. Industries affecting environment and health, like mining and tobacco, can be heavily taxed. Revenue foregone to the extent of Rs5,00,000 crore a year to benefit a small number of corporate bodies should be curtailed.
In fact, back-of-the-envelope calculations would show that if revenue foregone to the corporate bodies is slashed by a mere 10 percent (that is, Rs50,000 crore of Rs500,000 crore), we can double the pension amount to Rs400 and cover the entire old-age population of 10 crore!
As Baba Adhav says (see interview), all it requires is political will, something that we surely lack at present, may be because unlike in the US and other developed countries, they don’t count much as a vote bank.