Pension burden could soar to 4.1% of GDP by 2030: Crisil

India’s pension industry is seeing a sharp contraction, which has prompted Crisil Research to wave the red flag. It has warned that if India’s growing population of senior citizens if left out of the social security net, the government will be looking at an added fiscal burden of about 4 percent of GDP by 2030. India’s biggest problem in the next 20-odd years will be the silver economy - meaning a large population over the age of 60.According to Crisil, India’s elderly population is expected to triple to 300 million by 2050 and with most of this population believed to be financially insecure in their sunset years, it's a problem India cannot run away from.As of today, only 19 percent of government employees are covered under the Indira Gandhi National Old Age Pension Scheme and only 8 percent of private sector employees can look forward to a pension. And while the National Pension Scheme shields employees who joined government service after 2004, it's the private sector retirees who have a real reason to worry.Roopa Kudva, MD & CEO, Crisil said: "The private sector is a far bigger employer than the government, especially going forward and a large part of this employment is informal. So the worry is that, one, people who work in the informal sector won't be covered by pension; and two, unless there's a lot done to incentivise pension, even people working in the formal part of the private sector won't get pension and that creates fiscal risk."This fiscal risk will take the form of a much heavier pension burden one made heavier by rising inflation and other macro-economic conditions.Crisil estimates that the government's pension bill could spike to 3.4-4.1 percent of GDP by 2030, from the current 2.2 percent. Which is reason enough for the government to do more to improve the saving habit of Indians.Chief economist, Crisil, DK Joshi said, “We assume that central bank and government will be successful in bringing inflation down and also assume 5% inflation in the long-term projections that we have done. We believe that is a sustainable inflation for a country like India because it is also a high growth economy and that will be enough to incentivise savings in the financial sector.”Greater savings aside, Crisil says one avenue for the government to mitigate this threat will be to get more aggressive in clamping down on inflation. it says that if the government and RBI manage to bring inflation down to 6 percent by January 2016, and further to 4 percent by 2050, the country's balance sheet may get a bit of a breather.