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Economic Issue of Elderly in India

  1. Introduction
  2. Population Aging in India
  3. Problems of Older Persons
  4. Economic Security Schemes for Elderly
  5. Conclusions
  6. References
1. Introduction

The traditional norms and values of Indian society laid stress on showing respect and providing care for the elderly. Consequently, the older members of the family were normally taken care of in the family itself. The family, commonly the joint family type, and social networks provided an appropriate environment in which the elderly spent their lives. The advent of modernization, industrialization, urbanization, occupational differentiation, education, and growth of individual philosophy have eroded the traditional values that vested authority with elderly. These have led to defiance and decline of respect for elders among members of younger generation. Although family support and care of the elderly are unlikely to disappear in the near future, family care of the elderly seems likely to decrease as the nation develop economically -and modernize in other respects. For a developing country like India, the rapid growth in the number of older population presents issues, barely perceived as yet, that must be addressed if social and economic development is to proceed effectively. Unlike in the western countries, where there is dominant negative effect of modernization and urbanization of family, the situation in the developing countries like India is in favour of continuing the family as a unit for performing various activities (Siva Raju, 2000,2002, 2004). In spite of several economic and social problems, the younger generation generally looks after their elderly relatives. Though the young generation takes care of their elders in traditional societies, it is their living conditions and the quality of care, which widely differs from society to society.

2. Population Aging in India

The reduction in fertility level, reinforced by steady increase in the life expectancy has produced fundamental changes in the age structure of the population, which in turn leads to the aging population. The analysis of historical patterns of mortality and fertility decline in India indicates that the process of population aging intensified only in the 1990's. The older population of India, which was 56.7 million in 1991, is 72 million in 2001 and is expected to grow to 137 million by 2021. Today India is home to one out of every ten senior citizens of the world. Both the absolute and relative size of the population of the elderly in India will gain in strength in future. Among the total elderly population, those who live in rural areas constitute 78 percent. Sex ratio in elderly population, which was 928 as compared to 927 in total population in the year 1996, is projected to become 1031 by the year 2016 as compared to 935 in the total population. The data on old age dependency ratio is slowly increasing in both rural and urban areas. Both for men and women, this figure is quite higher in rural areas when compared with that of urban areas. More than half of the elderly populations were married and among those who were widowed, 64 percent were women as compared to 19 percent of men. Among the old-old (70 years and above), 80 percent were widows compared to 27 percent widowers. Men compared to women are found to be economically more active. In 1991, 60 percent of the males were main workers whereas only 11 percent of the females were main workers. Out of the main workers in the 60+ age group, 78 percent of the males and 84 percent of the females were in the agricultural sector. Since women's economic position depends largely on marital status, women who are widowed and living alone are found to be the worst among the poor and vulnerable.

3. Problems of Older Persons

Given the trend of population aging in the country, the older population faces a number of problems and adjusts to them in varying degrees. These problems range from absence of ensured and sufficient income to support themselves and their dependents to ill health, absence of social security, loss of social role and recognition and to the non-availability of opportunities for creative use of free time. The needs and problems of the elderly vary significantly according to their age, socio-economic status, health, living status and other such background characteristics. As people live longer and into much advanced age (say 75 years and over), they need more intensive and long term care, which in turn may increase financial stress in the family.

Among the several problems of the elderly in our society, economic problems occupy an important position. Mass poverty is the Indian reality and the vast majority of the families have income far below the level, which would ensure a reasonable standard of living. The Ministry of Social Justice and Empowerment, Government of India (1999) in its document on the National Policy for Older Persons, has relied on the figure of 33 percent of the general population below poverty line and has concluded that one-third of the population in 60 plus age group is also below that level. Though this figure may be understated from the older persons point of view, still accepting this figure, the number of poor older persons comes to about 23 millions. As people live longer and into much advanced age (say 75 years and over), they need more intensive and long term care, which in turn may increase financial stress in the family. Inadequate income is a major problem of elderly in India (Siva Raju, 2002). The most vulnerable are those who do not own productive assets, have little or no savings or income from investments made earlier, have no pension or retirement benefits, and are not taken care of by their children; or they live in families that have low and uncertain incomes and a large number of dependents

Nearly half of the elderly are fully dependent on others, while another 20 percent are partially so (NSSO, 1998). For elders living with their families-still the dominant living arrangement-their economic security and well being are largely contingent on the economic capacity of the family unit. Particularly in rural areas, families suffer from economic crisis, as their occupations do not produce income throughout the year.

Nearly 90 percent of the total workforces are employed in the unorganised sector. They retire from their gainful employment without any financial security like pension and other post retirement benefits. The organized sector workforce who includes the employees of the Central and State governments, of local government bodies, and of major enterprises in basic industries (e.g. manufacturing, mining etc.) constitute approximately 30 million workers and nearly one in every 10 members of the total Indian workforce of 314 million (Vijay Kumar, 2000). The work participation rate among the elderly was around 40 percent. More elderly men participate in the economic activities compared to women. The participation is high in rural areas compared to urban areas. The bulk of the 60 plus workers were engaged in agriculture. Nearly half of the elderly are fully dependent on others, while another 20% are partially so (NSSO, 1998). Women are more likely to dependent on others, given lower literacy and higher incidence of widowhood among them. The most vulnerable are those who do not own productive assets have little or no savings or income from investments made earlier, have no pension or retirement benefits, and are not taken care of by their children; or they live in families that have low and uncertain incomes and a large number of dependents (Bose, 1996). Vulnerable groups like the disabled, fragile older persons, and those who work outside the organized sector of employment like landless agricultural workers, small and marginal farmers, artisans in the informal sector, unskilled labourers on daily, casual or contract basis, migrant labourers, informal self-employed or wage workers in the urban sector, and domestic workers deserve mention here.

4. Economic Security Schemes for Elderly

Government under standardized economic security policy is covering retirement benefits for those in the organized sector, economic security benefits for those in the unorganised sector and old age pension for rural elderly. The government pension bill in 2001 was more than 1 percent of GDP or 15 percent of the revenues. The employees provident funds, though gradually extended from 5 to 179 industries, the increase in the labour force coverage has barely risen from 1 percent to 5 percent. Though little evidence is available on poverty among the elderly and the impact of cash transfers, several studies have raised concerns about target population, administrative efficiency and other such issues. Given high growth rate among the elderly and also high longevity, there needs serious thinking on the part of planners to evolve suitable programmes and schemes and bring reforms in the existing pension programmes.

As per the National Policy on Aging (1999), one-third of the elderly population (1993-94) is below the poverty line and about one-third are above it, but belonging to lower income group. The policy document also states that the coverage under the Old Age Pension Scheme for poor persons, which is 2.76 million (as on January 1997) will be significantly expanded with the ultimate objective of covering all older persons below the poverty line. NOAP scheme (National Old Age Pension Scheme) which is initiated by the Central Government provides for a pension of Rs.75/- per month to the old people living in the conditions of destitution. The budgetary allocation for NOAP scheme, which was Rs.450 crores in 1999, has been increased to Rs.465 crores in 2002. The NOAP scheme is in operation all over India and the reports indicate that the most vulnerable sections of Indian society like, women, and lower caste individuals have been benefited from this scheme.

All State Government and Union Territories have their own schemes for old age pension and the criterion of eligibility and the quantum of pension amount vary among these States. The average old age pension which is nearly Rs.150 per month was below the average per capita income per Indian. The percent of elderly who benefited from the old age pension scheme varies across states, with the minimum of 0.3 percent to 68 percent. As on 1999, a total amount of Rs.227 millions were spent to benefit 49 lakh beneficiaries among the elderly.

The combined national budget allocation for the NOAPS comes to 0.6 percent only as compared to 6 percent of Central Government revenue expended on pension for its employees (Irudaya Rajan, 2001). The Central government has announced in the year 1999 another social security programme called 'Annapurna Programme'for the elderly destitutes. Under the programme, all older persons who are eligible for the NOAPS are given 10 kg. rice / wheat monthly, free of cost, through the existing public distribution system and the expected beneficiaries for the programme are estimated to be 6.6 millions. The total number of beneficiaries during 2000-2001 for National Old Age Pension Scheme in the country is worked out as approximately 68.81 lakh. This would imply that 13.76 lakh beneficiaries would be eligible for coverage under the "Annapurna" Scheme. An amount of Rs.100 crores has been provided in the budget for 2000-2001 for the Scheme.

The Ministry realizes that poverty alleviation programmes directed at the aged alone cannot provide a solution to the income and social security problems of the elderly and has so commissioned the National Project tilted OASIS (Old Age Social & Income Security) as a result of growing concern for old age social & income security; especially for the 330 million young workers in the unorganized sector (including farmers, shopkeepers, professional, taxi-drivers, casual/ contract labourers etc.) out of the total 370 million workers in India. According to this project, every young worker can build up enough savings during his/her working life, which would serve as a shield against poverty in old age. The need for this arose because of lack of adequate instrument to enable workers in the unorganized sector to provide for their future old age.

5. Conclusions

The beneficiaries among the older persons for various schemes and programmes initiated by the government are very insignificant when compared to the very high size of their population and the growth rate among them. Further, given the level of urbanization and industrialization of India, economic factors and diminishing value system are likely to make welfare of the elderly as the most critical area for intervention. In Indian context, social security has to be integrated with anti-poverty programmes. This will involve an optimal combination of promotional and protective policies with the latter being based on an appropriate blend of social insurance, social assistance and social welfare effort. There is need to protect and strengthen the institution of the family and provide such support services as would enable the family to cope with its responsibilities of taking care of the elderly. Along with proper and effective professional welfare services that need to be evolved to provide counseling services both to the elderly and their family members, it is also important to provide financial support to low income family groups having one or more elderly persons. The rapid population ageing will necessarily bring social change and economic transformation. In view of this, a holistic approach to population ageing taking social, economic and cultural changes into consideration is needed to effectively solve the emerging problems of the elderly. Based on the existing diversities in the ageing process, it may be stated that there is a need to pay greater attention to the increasing awareness on the ageing issues and its socio-economic effects and to promote the development of policies and programmes for dealing with an ageing society.

6. References

Bose, A.B. 1996: Economic and Social Conditions of the Elderly, with a Special Focus on Women: Needs and Capabilities of the Elderly. Implications of Asia's population future for older people in the family (ESCAP Asian Population Studies Series # 145). Bangkok: ESCAP, cited in Vijay Kumar, S. 2003: "Economic Security for the Elderly in India: An Overview", An Aging India: Perspectives, Prospects and Policies, The Haworth Press p.45-65, New York.

Government of India 1999 National Policy on Older Persons. Ministry of Social Justice and Empowerment, New Delhi.

Irudaya Rajan, S. (2001, February 24): Social Assistance for Poor Elderly: How Effective? Economic and Political Weekly, 613-617.

National Sample Survey Organisation 1998 Morbidity and Treatment of Ailments July, 1995- June, 1996 (NSS 52nd Round) Report No. 441, New Delhi, Government of India.

Siva Raju, S. 2000: "Ageing in India: An Overview", in 'Gerontological Social Work in India', Murli Desai and Siva Raju (Eds.), Delhi, B. R. Publishing Co.

Siva Raju, S. 2002: "Health Status of the Urban Elderly: A Medico-Social Study", Delhi, B. R. Publishing Co.

Siva Raju, S. 2002: "Meeting the Needs of the Poor and Excluded in India", Situation and Voices, The Older Poor and Excluded in South Africa and India, UNFPA, Population and Development Strategies, No. 2, 93-110.

Siva Raju, S. 2004: "Profile of Elderly and Organisations Working for their Care: A Study in Mumbai", Family Welfare Agency, Mumbai (Mimeo) Vijay Kumar, S. 2000: "Social Security in Indian Context", cited in Vijay Kumar, S. 2003: "Economic Security for the Elderly in India: An Overview", An Aging India: Perspectives, Prospects and Policies, The Haworth Press p.45-65, New York.

Vijay Kumar, S. 2003: "Economic Security for the Elderly in India: An Overview", An Aging India: Perspectives, Prospects and Policies, The Haworth Press p.45-65, New York.

For publication in the Harmony Magazine,
Mumbai 2004

**Professor, Unit for Urban Studies, Tata Institute of Social Sciences,
Deonar, Mumbai - 400 088

S. Siva Raju**