Over 61% of elderly in India will have no income security by 2050: Study

If pension continues to cover only 35% of senior citizens as it does today, 20 million, or 61.7% of India’s elderly population, will be without any income security by 2050. 

The Centre pays Rs 200 per month under the Indira Gandhi National Old Age Pension Scheme (IGNOAPS) to every Indian over the age of 60 and living under the poverty line (the ability to spend Rs 33 per day in urban and Rs 27 per day in rural areas as per the Tendulkar committee on poverty line). The states are encouraged to add to this sum and are free to expand the coverage. Currently, states pay anything between Rs 200 and Rs 2,000 as public pensions.

A study was conducted in Gujarat and Rajasthan by the Centre for Equity Studies (CES) in August-November 2016 to ascertain if public pensions should be universal or targeted. It also tried to find what should be the minimum offered by a public, non-contributory pension. 

It collected opinions and experiences of 1,505 people above the age of 55 years across 14 locations in Gujarat and Rajasthan. The states were chosen because they represent two ends of the spectrum in the universalisation debate: Gujarat, India’s 10th richest state in per capita gross domestic product (GDP) ranking, offers a targeted pension of Rs 400 only to the poor at the time the study was conducted (since then the amount has been revised to Rs 500), and Rajasthan, 23rd in the per capita GDP list, extends Rs 500 to (nearly) all senior citizens. Opinion across both states was unanimous that public pension should be extended to all elderly and should be initiated earlier than at age 60 years. The popular view was that Rs 2,000 was an adequate pension sum, which is four to six times higher than their present entitlement.

Gujarat pursues a narrowly targeted scheme whereby only the poorest senior citizens are entitled to public pensions. Rajasthan has near-universalised pension entitlements whereby women above the age of 55 years and men above the age of 58 years receive pensions as long as they are not entitled to pensions from any other source or are not taxpayers.

Pensions are an assurance of continuation of consumption levels required for dignified living in the face of reduction in income due to physiological atrophy and comparatively restricted income-generating opportunities. At the time of the study, the beneficiaries in Gujarat were entitled to Rs 400 per month and Rajasthan, Rs 500. 

The average monthly ‘sufficient’ pension amount in Rajasthan was Rs 1,875 whereas in Gujarat it was Rs 2,494, the study found. The modal value – the most frequently occurring response – was Rs 1,000 in Rajasthan and Rs 2,000 in Gujarat. There was no significant difference between men and women on this count.