The post-retirement benefits of India’s senior citizens will not provide them comfort through the winter of the lives, an EY (formerly Ernst & Young) report indicates. The country will have 180 million sixty-plus citizens or 12 per cent of its total population by 2030.
The demographic report goes on to add that rise in life expectancy had become a cause of concern as high inflationary pressures kept widening the gap between the required and expected income.
For a 30-year-old earning Rs 10 lakh a year and retiring at 65, his retirement corpus would only cover expenses for eight years. Going by the current life expectancy rate, seniors are expected to live another 16 years-plus, the report said.
Clearly indicating an imperative need for a social security support mechanism, statistics on employment show that 71 per cent or 33.6 crore people were in the informal sector which does not provide for any reliable post-retirement system. Only 29 per cent or 13.6 crore in the working class in the formal sector had access to post-retirement benefits such as pensions, general and contributory provident funds and group superannuation schemes.
The current spread of over 60 per cent population in the 15-59 age group though laudable has its downside. It would lead to a gradual rise in the elderly population each year whose retirement benefits would progressively turn insufficient.
India’s growth rate of its elderly population is higher than the population growth rate and is said to be in line with the trend of gradual ageing seen in other countries. However, China plans to relax its one child policy to overcome that fallout.
In terms of economic independence (NSS 1995 and 2004 data) about 70 per cent of the elderly female population in rural and urban areas depend on their children or wider family, while a little over half the male population remaining independent of the support.