Reasonable Old-Age Pension Can Lead To Economic Upliftment

I was not in favour of an enhanced salary and pension proposal for legislators and ministers at a time when the state’s economy was passing through severe crisis. Out of 365 days in a year, for 364 days, the state had to depend on “ways and means”, overdraft. Salary payment to the school and college teachers was not regular. It was very difficult for the Finance Department to organise monthly pension for a few lakhs of old age pension holders.

In the supplementary budget for 2002-03, old age pension of only Rs 50,000 was added afresh after a lot of accounting exercise. But due to mounting pressure from the rule-makers, as Minister Parliamentary Affairs, I had to announce the revised salary and pension in the House. But I made a check on it with a ceiling of highest Rs 15,000 per month for which I had to face the wrath of many legislatures.

I have never said no to a good, sound, reasonable, pension package and have always been in favour of universal pension to old citizens, maybe not be on the same scale but with a justified gap between the lowest and highest pensions.

Unfortunately, this social justice has not yet been extended to millions of poverty-stricken people, particularly in Odisha. Moreover, the gap between a large section of people with Rs. 300 to Rs. 500 old age pension per month and a few thousands with a pension of Rs 60,000 to Rs one lakh per month is still prevalent. Out of Odisha’s population of 4,19,47,358 in the 2011 census, the population of 60 plus citizens is more than 40 lakh (9.5%).  They are getting Rs.300 per month as pension; and those above 80 years are getting Rs. 500 per month. This together, is about 15 lakh (05.6%) of the total population of Odisha in 2016. With or without this small amount of pension, the plight of the beneficiaries is multiplying with increasing needs. Per capita per-day expenditure capacity of each old pension holder is only Rs.10 to Rs.15. It is a participatory scheme with Centre-State participation and was started in latter part of 1970s.

Odisha’s contribution is very negligible in comparison to many other states. Most of the old citizens in Odisha fully depend on their family members even though they may be in the low-income category. This category of fully dependent old citizens is not less than 56% and about 22% partial dependant live on the family income. In addition, non-engaged dependents are always considered a burden. Incidents of suicide and homicide are increasing. Low income of the family earners fails to support the non-earning dependents resulting in family feuds.

The growing older population, deprived of social security is supposed to be the prime concern of a welfare state. To plan a quality life, full of happiness and the right to live with dignity as provided in the Constitution under Article 21, the state has to advance its plan for increasing old age pension. Ageing citizens can also be engaged for soft skill work as an extension of the social security scheme, making them support the family income. The gradual weakening of the traditional joint family system in India has made provision of social security for the older population a necessity.

Social security also includes starting some income-generating programmes for able aged individuals, as it was prevalent at the time of the joint family system. A good old age pension package with the equal participation of the Centre and State for all those above 60 years should be a part of welfare and social security measures.

A very few states like Kerala, Andhra Pradesh, Haryana, Delhi, Puduchery, Jammu & Kashmir and Telengana provide monthly reasonable old age pension above Rs 1,000 per month. A group of economists advocate a universal old age pension at the rate of 50% of the total monthly wages of the state’s notified unskilled minimum wage for above 60 years, and of skilled minimum wage for above 70 years and of high skilled wage for above 80 years. They argue that it would reactivate the bottom level economy with additional purchasing power of the family. Moreover, the provisions of Article 41 of the Constitution are ensured with natural justice to the toiling millions in a welfare state and social security for all old citizens.

If aged citizens are provided some work to earn and support their family according to their capacity or ability besides provision of good pension, it will reactivate the economy of the country as a whole.


(The writer is a former Finance Minister and the views are personal)

Get real time updates directly on you device, subscribe now.

Comments are closed.