Issues with existing government mechanisms:

  • Indira Gandhi National Old Age Pension Scheme has been paying Rs. 200 a month as old-age pension. A sum which has remained unchanged since 2006, when it was introduced.
  • Due to inflation the value of this has depreciated to under Rs. 100 over the past 11 years, less than a day’s notified minimum wage.
  • Union government passed a law in 2007 (the Maintenance and Welfare of Parents and Senior Citizens Act) to make maintenance of parents/senior citizens by children/relatives obligatory and justiciable through tribunals.
  • The Act also provides for revocation of transfer of property by senior citizens in case of negligence by relatives, penal provision for abandonment, etc.
  • But this Act has miserably failed to serve its purpose.
  • The Ministry of Social Justice, the nodal ministry for the elderly, also has a grand plan called the Integrated Programme for Older Persons, which has been operational since 1992.
  • But this is underfunded and languidly administered, the programme managed to reach just 23,095 beneficiaries in 2015-2016.
  • India spends only 1.45 per cent of its GDP on social protection, among the lowest in Asia, far lower than China, Sri Lanka, Thailand, and even Nepal.
  • India has an immature pension industry and a mere 7.4 per cent of the total Indian population is covered under any form of pension plans, which is alarming.
  • Almost 85 per cent of Indian labour is still deployed in the informal sector, mostly as daily wage workers.
  • It is extremely difficult to cover informal sector employees under a national pension scheme.
  • People are also reluctant towards investing any part of their income over a large period of time.