India needs radical expansion of public support for the elderly, economists say

(Illustration by Suneesh K)

India must plan a radical expansion of public support for the elderly and near-universal social security pensions would be a good start, economists Jean Drèze and Esther Duflo said in an article.

“Elderly persons, especially widows, often struggle with poverty, ill-health and loneliness, all associated with a risk of depression. Financial assistance would help them to lead an easier life. Some Indian states already have near-universal pensions, and there is a case for extending this approach across the country,” said the article published in Ideas for India.

Life expectancy in the world’s second-most populous country has more than doubled since Independence in 1947, to around 70 years. The fertility rate has crashed to two children per woman from about six. The share of the persons aged 60 and above in the population is projected to reach 18 percent by 2036 from 9 percent in 2011.

Jean Drèze is a Visiting Professor at Ranchi University as well as Honorary Professor at the Delhi School of Economics. Esther Duflo is the Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics in the Department of Economics at the Massachusetts Institute of Technology.

Recent data and studies have shown that many elderly, especially elder women, are living alone and are prone to depression, the authors said.

“The hardships of old age are not related to poverty alone, but some cash often helps. It can certainly help to cope with many health issues, and sometimes to avoid loneliness as well,” said the report.

While India has schemes of non-contributory pensions for the elderly, widowed women, and disabled persons under its National Social Assistance Programme, the eligibility is restricted to ‘below poverty line’ families, based on outdated and unreliable lists, some of which are 20 years old, the economists said.

The central contribution to old-age pensions under the National Social Assistance Programme has stagnated at a measly Rs 200 per month since 2006, with a slightly higher Rs 300 per month for widows, they pointed out.

Several states have enhanced the coverage or amount of social-security pensions beyond the national norms, achieving ‘near-universal’ coverage of widows and elderly persons.

“When it comes to old-age pensions, targeting is not a good idea in any case. For one thing, targeting tends to be based on household rather than individual indicators,” the economists said. “A widow or elderly person, however, may experience major deprivations even in a relatively well-off household. A pension can help them to avoid extreme dependence on relatives who may or may not take good care of them, and it may even lead relatives to be more considerate.”

The governments should consider all widows and elderly or disabled persons as eligible for support, subject to simple and transparent ‘exclusion criteria’.

While the more prosperous southern states have near-universal coverage for the elderly, even some of the poorer states like Odisha and Rajasthan have near-universal social security pensions.

“It would be much easier for all states to do the same if the central government were to revamp the NSAP. The NSAP budget this year is just Rs 96.52 billion – more or less the same as ten years ago in money terms, and much lower in real terms. This is not even 0.05 percent of India’s GDP!”