Universal pension system

This refers to ‘Security at sunset’ (July 1). The editorial brings out various aspects of a possible shift to a viable pension system for the informal sector. The absence of a formal statutory pension system to provide for those not covered by regulated pension/PF/insurance schemes is forcing the government to dilute the pension systems in government and public sector organisations.

The concept of pension as deferred wage is not well understood even by the lawmakers. Recognition of this concept will enable building a viable and reliable social security system for elders.

While improvements in existing pension, provident fund and healthcare systems should continue to be a policy priority to insulate elder care from funds shortage, the following suggestions may be considered: for those earning annual income above a threshold level, make saving a pre-decided percentage of income in long term financial instruments mandatory; and encourage employers to have pension funds and medical insurance for all employees including outsourced workforce.

MG Warrier


Interest on small savings

This refers to ‘Rates of small savings schemes unchanged for three months’ (July 1).

It is unfortunate that at a time when interest rates are on an upward trajectory as evidenced by the RBI’s steep hike in repo rate, the government has preferred to keep silent on the much required hike in interest rate on small savings.

The interest rates on PPF, NSC, etc., have not been revised for the last 10 quarters despite higher yields on G-secs and many people, especially senior citizens, depending solely on such interest amounts for their livelihood. As the next Lok Sabha elections are far away, perhaps there is no political compulsion for the government to win the hearts of such small savers.

BN Bharath


Maritime threat

Apropos ‘India has to be vigilant, protect its interests in Indian Ocean Region, says NSA Ajit Doval’ (July 1), while India has built a large ground force to deal with threats from China, a maritime threat would represent a new front with added complications.

Much of the focus of India’s maritime security has been on the relatively minor naval threat from Pakistan and non-traditional threats including piracy and terrorism.

While these concerns remain, they have been overtaken by worries about China as an emerging Indian Ocean Region power, with a growing footprint in the area. The Indian Ocean is important to China also because its trade and energy resources transit this route. But an expanded naval presence will be a direct threat to India.

Hopefully, a clearer enunciation of India’s Indian Ocean strategy will translate into efforts for coordination between India and its partners in dealing with maritime challenges, especially those posed by China.

N Sadhasiva Reddy


Asset quality of banks

This refers to ‘Gross NPAs of banks fall to six-year low of 5.9% in March’ (July 1).

The asset quality, performance and capital adequacy indicators of all scheduled commercial banks (SCBs) as of March 2022 per the RBI’s Financial Stability Report show that the SCBs have performed well and moved forward considerably.

Although the SCBs are robust in respect of the main parameters, given the uncertainty of the persisting geopolitical tensions, the soaring inflation, growing unemployment and swelling interest rate scenario, the economic activities across the country may face stress, resulting in the creation of knocking-on effects on the balance-sheets of banks.

The growing lending rates pushed up by the rising monetary policy rates, delays in the resolution and recovery of NPAs and quality-compromising credit facility dispensation need to be addressed by the banking regulator to prevent the inevitable impact on the quality of the assets.

VSK Pillai

Changanacherry, Kerala