Old age security in india: an analysis of the operational retirement programmes

Old Age Security is one of the most critical aspects of social security and has immense socio-economic significance, especially in a developing country. In developing and underdeveloped countries, subsistence income and meager saving combines lethally with inflation and rising cost of health care, thus pushing those affected to a frightening chasm of poverty and destitution. Under the circumstances, expenditures on retirement programmes, both public and private have been increasing at a tremendous rate, and are rationalized by the fact that pension plans are merit goods that carry enormous welfare implications for a very large and venerated section of the society which is very vulnerable.
In India, the issue of old age security is addressed in multiple levels. While there are interventions by the central, state and local governments for both their employees as well as for the public, the private sector independently has their own versions of retirement plans for their employees. The state pursues an affirmative action plan to provide succor to the workers of the unorganized sector which presents the biggest challenge to the objective of universal pension coverage of the aged in India. The market demand for pension plans is serviced by the corporate sector which responds to market signals with their offerings of multi-featured private pension plans.
Over the years the government pension system was found to be unsustainable, especially with the exigencies of fiscal prudence as articulated by the central and the various state FRBM Acts. The state has responded to the crisis by adopting the New Pension Scheme which was designed to be self-sustaining and which dramatically reduced the pension liabilities of the state towards its employees.
The state has been sensitive to the grossly inadequate provision of old age security in the country, especially for the poor and vulnerable, in the unorganized sector. While it has sought to cover the private sector employees with the The Employees’ Provident Fund Scheme, 1952, and the The Employees’ Pension Scheme, 1995, the real challenge lies in extending the protection of pension to the unorganized sector. The introduction of the Swavalamban Scheme and the Atal Pension Yojana constitute affirmative action in the right direction, which seeks to fulfil a task that is as magnanimous is it is gargantuan. Obviously, state intervention is inadequate unless the process is supported and supplemented by the civil society.