The Hindu Business Line : Caring for the aged: Ways and means

An important component of development is long and healthy life. The latest estimates of life expectancy for 2004 from human development indicators database for 177 economies show that there are still seven economies, all in Africa, with a life expectancy of less than 40 years ( Malawi, Central African Republic, Zambia, Zimbabwe, Lesotho, Botswana and Swaziland). On the other hand, the vast majority of developing countries, especially those in Asia, have experienced quan tum jumps in life expectancy over the past five to six decades, thanks to national and international efforts aimed at the eradication of common communicable diseases such as smallpox, TB and Malaria.

In India, for instance, life expectancy now stands at 68, a remarkable achievement compared to just 20 during 1911-21 and about 32 at the time of Independence. In fact, the country has to add a little over 10 years to join the ranks of countries with the highest life expectancy, for example, Japan with 82 years and Switzerland 81.

Long life and ageing are interlinked. The World Health Organisation data point to the phenomenal increase in the numbers of the aged. At the turn of the century, there were 600 million people aged 60 and over. This will grow by 2025 to 1.2 billion, about the current demographic size of India. By then, three of every four aged persons will be in the developing countries.

International Old Persons Day

Yesterday (October 1) was the International Day of Older Persons, an occasion to focus on the plight of some of the senior citizens in dire straits mostly due to the lack of a regular income above the poverty threshold. Parents who have lost their one and only child, those abandoned by children, and the aged whose children earn low incomes come under this category. Problems of the aged poor get compounded when they suffer from chronic ailments.

We pay a price on various fronts for what has come to be known and accepted as the dynamics of economic progress. The process includes internal and external migration of the able-bodied, breaking up of the joint family system and significant reduction in the extent of allegiance to and practice of filial piety. It then becomes mandatory in a civilised country for the society as a whole to look after the aged poor. Otherwise, issues such as development and inclusive growth become meaningless constructs devoid of the human dimension.

Social Cash Transfers

Ensuring social protection/social pensions in old age in the context of rapid ageing is a slim report summarising the main issues debated at and the results emanating from an inter-governmental regional seminar held in Bangkok during January 29-30, 2007.

The seminar was organised jointly by HelpAge International, UN Economic and Social Commission for Asia and the Pacific, ILO, Japan Foundation and Department for International Development (UK). It was described as “the first regional interaction of government policy makers and administrators responsible for existing social pension schemes in Asia”.

As noted in the foreword to the report, there is a strong case for universal non-contributory pensions to older people: “Wherever we see older people receiving non-contributory pensions, we get the message that, however small, this regular income makes a difference to them, not only in terms of purchasing power but also in terms of recovered dignity within their families and communities.”

Also, the report has a declaration by the participants from the 13 countries that there is clear evidence internationally of the positive impact of non-contributory social pensions in the reduction of poverty.

Targeted, not Universal

In developing social pension policy, the question is whether it should be means-tested and restricted to vulnerable older people or a universal sheme, be adopted which is convenient to implement and will lead to a rise in the living standards of the widest possible section of the population.

In actual practice, most national schemes are means-tested, as in Malaysia, Thailand, and India as well . Nepal has a universal scheme, but it is applicable to those aged 75 and above — a limit that is considered high. Similarly, Vietnam uses a cut-off of 85 for the universal scheme. In India, social assistance to the poor families is an obligation on the part of Central and State governments under the Constitution. The subject comes under the purview of the Ministry of Social Justice and Empowerment. In 1995, the National Social Assistance Programme was launched which comprised a targeted National Old Age Pension Scheme (NOAPS), Annapurna Scheme (food support scheme), and the National Family Benefit Scheme (NFBS).

Since inception, the old age pension amount has remained unchanged at Rs 75 a month. Only in 2006-07 was the amount raised to Rs 200 per month, with an appeal from the Centre to the States to match the amount and make the total pension per person Rs 400. The States’ contribution varies from one State to another.

All States and Union Territories have the NOAPS, which covers about 50 per cent of older people above 65 years old who are under the poverty line and destitute with little or no regular means of subsistence.

Move towards Universal

Mr Jomo Kwame Sundaram, Assistant Secretary-General for Economic Development, in the United Nations Department of Economic and Social Affairs (DESA), New York, takes a clear view: “Means-testing is problematic for two reasons: It misses many people, and it is expensive to operate. There is no broad-based support for targeted schemes, which results in them being fiscally constrained.” The view deserves wide support.

None above the age of 60 with a decent pension or well-placed children taking care of them will want to claim a government pension of a few hundred rupees.

In India, as a first step, the means tested scheme can be combined with universal by limiting the former to those between 60 and 70 and with the possibility for opting out. This could be a prelude to eventually moving to the universal scheme.

(The author is Visiting Faculty, Sri Sathya Sai University, Prashanti Nilayam. He can be reached at bhanoji@gmail.com)

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