Good News! Retirement age and pension may increase, PM Economic Advisory Council recommended, Good news! Retirement age and pension may increase, PM Economic Advisory Council recommended

The Economic Advisory Council to the Prime Minister (EAC-PM) has recommended on the basis of a study that the government should increase the retirement age while launching a universal pension income program and to improve the income security for the elderly in the country. To pay a minimum pension of Rs 1,500-2,500 per month. The study was conducted by the Institute for Competitiveness (IFC) on behalf of EAC-PM to compile the Index on Quality of Life for the Elderly across India. The index ranks states on financial wellbeing, social welfare, health systems and income security for the elderly.

Increase in the number of elderly people in India

According to the Economic Times report, according to the World Population Prospects, 2019, the number of elderly people in India is expected to be 319 million by the year 2050. This would be 19.5% of the population. As of 2019, there were 139 million in India, which is 10% of the population aged 60 years or above.

Pension should be at least 50% more than the minimum wage

It has suggested that the government launch a pilot on Universal Pension Income Program for all elderly people living in the districts identified under the Aspirational District Programme. It should also be ensured that the pension is at least 50% higher than the minimum wage in the country. The publication quoted the study as saying that it should also be a non-contributory scheme, with the overall pension amount being funded equally by the central and state government. The study further said that the pension amount should be based on budgetary taxable means and deposited through direct benefits transfer.

National old age pension, increase in widow pension

According to the report, the COVID-19 pandemic has underscored the gravity of certain needs, such as the need for quality healthcare, education and awareness, water and sanitation facilities, nutrition and accommodation where social distancing is possible. The study suggested that the amount under existing old age schemes like Indira Gandhi National Old Age Pension Scheme and IG National Widow Pension Scheme needs to be increased at the earliest. The pension under both the schemes is Rs 300-500 per month.

Need for reforms in Atal Pension Yojana

The report recommends improving the financial stability of the Atal Pension Yojana, besides strengthening the scheme to cover many informal sector workers. The suggestion to raise the retirement age is to align it with the increasing life expectancy. It said the government should ensure that the proportion of working life spent in retirement remains constant at least in the long run.