Time to think of universal basic pension for all Indians and not just Govt employees

In the Global Pension Index, India is ranked 34th. Significantly, there are eight countries from Asia in the bottom 10 ranked 30 to 39. Pension is clearly neither a priority nor a right till now in these countries. Indonesia, South Korea, Japan and China are ranked just above India while the first 10 slots are occupied by countries like Netherlands, Denmark, Finland, Norway, Israel, Sweden and Australia.

In sharp contrast, several European countries provide citizens the privilege of receiving pension from the State. Citizens paying Income Tax for 30 years become eligible for pension in some European countries while in the UK people contributing to National Insurance for at least 10 years become eligible for state pension at the rate of Rs.5,000 per week at the lowest level and around Rs.17,800 per week at the highest for those who have made their contributions to NI for 35 years.

What is the percentage of Indians who receive pension from the State or from employers? The question has assumed importance in the wake of the Agnipath controversy with the scheme denying both pension and gratuity to the Agniveers.

Consolidated and authentic data are hard to come by even in today’s digital age. But an indication is that only around 4% of Indians work for the union and state governments, armed forces, Railways and the PSUs. Not all of them are eligible for monthly pension either. An OECD report from 2018 put the figure at 58 million Indians who were covered by the pension scheme, which is about 4% of the population.

Government rules stipulate the minimum pension paid is Rs.9,000 per month while the maximum limit on pension is 50% of the highest basic pay in the Govt. of India (presently Rs.2,50,000) per month. While some retired employees claim to be receiving more in pension than they took home as salary—linked as they are to inflation—at the highest ranks a monthly pension of Rs. 100,000-125,000 is deemed to be handsome for a retired couple, who are also covered by the Central Government Health Scheme.

“Government employees enjoy security of tenure, government housing and health services, interest free loans to construct houses, which are then often let out to the government itself. There are instances of ex-government employees receiving more in pension than they ever received as salary when they were in service,” says a senior citizen who never served in the government.

“Those of us who were not in the government, faced uncertain tenures and periodic unemployment, postponed consumption, scrounged to save and are forced to work for as long as we can,” he complains bitterly. With medical bills rising and no social security, he is stung by inflation and bitterly resents the pampered government employees.

When the BJP Member of Parliament Varun Gandhi this week offered to forgo his pension if the government is unable to pay pension to fresh army recruits, Agniveers, the offer was widely welcomed. Why should MPs, MLAs and government employees be paid pension if the recruits cannot be paid is a question that angry young men have been asking the past few weeks; and with good reason.

The State actually pays a variety of ‘pensions’ including Old Age Pension, Disability Pension, Kisan Samman Nidhi, Unemployment Allowance and monthly payments to various categories of people including those who were imprisoned during the Emergency. Several state governments pay varying sums as monthly pension to writers, artists et al. MPs also receive pension @Rs 20,000 if they complete a full five-year term, which keeps increasing every subsequent year. MLAs in Punjab till this year were receiving pension separately for every term.

Information received under RTI by P.P. Kapoor from Panipat, reported The Tribune in 2020, revealed that actress Vyjayanthimala was receiving Rs. 39,000 and Rekha and Chiranjivi Rs. 27,000 each as monthly pension for being former MPs. The pension amount being paid to former MPs had gone up from Rs. 58.02 crore in 2017-18 to Rs. 70.50 crore in 2018-19, an increase of 21.5% , according to the RTI.

The report quoted K. Sona, Deputy Secretary in the Lok Sabha secretariat as saying that 3,580 ex-MPs were getting pension, while 268 dependents of the deceased ex-MPs were being paid family pension.

Unconfirmed reports suggest that a former CM of Haryana receives Rs 2.5 lakh per month as pension.

Why can’t a universal basic pension be assured to citizens beyond the age of 60 instead of paying a small minority of former government employees? Yashovardhan Azad, retired IPS, agrees that every senior citizen needed his basic needs to be fulfilled by the State and this could be between Rs.25000 -Rs.30,000 per month. But he doubts if this is possible in a large country like India.

With the 2011 Census putting the number of Indians above the age of 65 at 11% of the population and the number of senior citizens swelling, there is a need to re-look at the pension policy and not just for government employees. A national policy covering every Indian should not be seen as unrealistic.

(This was first published in National Herald on Sunday)