(Speech by D.Gopalakrishnan
Secretary, Asia, TUI (P&R) at Chennai.
Our CHQ Vice President and Asia Secretary of TUI (P&R) spoke in the 2nd All
India Conference of All India Postal and RMS Pensioners Association, held in
Vijayawada very recently.
The
same is reproduced here.
2nd AIC of AIPRPA at Vijayavada on
17/9/2017
Comrade President, General Secretary, Leaders on the dais and my
dear Pensioners, on behalf of TUI (P&R) and AIBSNLPWA, I express my sincere
thanks for extending an invitation to your 2nd AIC and I wish
your conference every success. Though your organization is 3 years old
child, your leaders have more than 40 years of trade union experience.
Your organization has got established branches in 22 states within this 3 year
period which is a marvelous achievement. Your CHQ is also bringing out a
monthly journal regularly and it is a best journal both in content and
outlook. The main slogan of your organization is “Protect the pension and
social security”. It is in conformity with the resolution of TUI (P&R).
Attack on senior citizens’ Rights
As a result of 2008 financial crisis, pensions across Europe are
affected. In 2009, Poland reduced the number of people eligible for early
retirement from 1.53 million to 8,60,000 and pension was reduced from 51% to
26%. Older people in southern Europe were hit hard, particularly Greece
and Portugal. Spain froze its pension, while Italy legislated to
encourage private pensions. Other negative impacts included widespread
cuts to health and home care, subsidized transport. In 2012 Portugal
reduced the subsidy to senior citizens for public transport; within six months
41,000 older people in one area called greater Lisbon had stopped buying the
monthly travel passes. To face these onslaughts a global organization for
pensioners became necessary and hence TUI (P&R) was formed.
Recently Brazil introduced pension cut according to which to
become eligible, one has to serve for 49 years; family pension was reduced by
50%, thereafter another 10% decrease for ach dependent. Against this
attack there was a powerful strike on 28/4/2017 in Brazil.
Indian situation
According to socio economic caste census data released in July
2015, out of 243.95 million households nearly 75% live in rural India.
56.25% of rural households do not have any agriculture land. 9.68% rural
households have a member who is getting regular monthly salary and only 1.61%
have their own small business. 51.14% depend on manual casual labour
income. Only 3% rural households has a member who is a graduate.
74.5% rural households have less than Rs.5000/- income per month and only 8.3%
has an income of more than Rs.10000/- per month.
In India 116.6 million are senior citizens and only 28.9% of
senior citizens receive pension. Out of this, 2/3rd are getting a very
small amount as old-age social pension who are below poverty line.
According to a study conducted in 2007-08, in India, 60%
of men and 19% of women above the age of 60 are working. In rural India
the percentage is 66 and 23 respectively. 10.9% of senior citizens were
depending on others in 1961 which rose to 13.1% in 2001. Only 12% of
working population are getting pension in India. There are one crore
pensioners in Central Government/para military/Central PSUs and nearly one
crore in State Governments/Teachers. It constitutes 1.67% of population
and 2.45% of Electorate. Art. 41 of Indian Constitution talks about “well-being of
senior citizens”. National Policy on older persons (NPOP) was evolved in
1999. Maintenance and Welfare of Parents & senior citizens Act, 2007
was enacted in December 2007. It is not enough to have proper policy but its
proper implementation should be ensured. Indian Govt. spends only
0.032% of GDP for senior citizens.
Universal Social Pension Possible
A question may arise whether it is affordable for low and middle
income countries to pay guaranteed basic income for older people? Research in 50 countries found that the
cost of a universal pension for all over 65 at 20% of average income would
range from 0.4% to 1.8% of GDP. Social pensions help to tackle inequality
and support growth. Bolivia, despite being one of the poorest countries,
has had a progressive policy environment for older people with a National Plan
on Ageing, free healthcare for older people and a non-contributory universal
pension. In Bolivia, the universal Dignity Pension for everyone from the
age of 60 has led to dramatic increases in school enrolment and falls in child
labour in households. Sweden, as a developing economy, 100 years
ago, introduced universal pension scheme. Norway introduced it
in 1937 before achieving the current status of high-income country. Even
Maurtius introduced a universal pension in 1958.
Brazil ranks highest among BRICS countries in
terms of income security. This is due to near universal pension system
which has relatively high levels of adequacy by international standards.
The system includes two forms of non-contributory pension for rural and urban
areas, as well as minimum pensions within the contributory system, all of which
are tied to the minimum wage. This has made a major contribution to reductions
in inequality over the last two decades. The poverty rate among
older persons in Brazil would be 48% in the absence of its public pension
system, compared with the present rate of 4%.
Status of old people in various countries
With the available datas, Global Agewatch Index provides ranks
every year from the year 2013 for 96 countries (where nearly 90% of senior
citizens live) out of 194 countries. The ranks are awarded taking into
account four domains viz. Income Security, Health Status, Capability &
Environment. According to Global Agewatch Index 2015, Switzerland,
Norway, Sweden, Germany, Canada, Netherlands,
Iceland, Japan, USA & UK are in the top ten.
On the basis of these ranks, among the BRICS group, China is at
52nd place, Brazil – 56th, Russia – 65th,
India – 71st and South Africa 78th (among 96
ranks). In 2014, India was in 69thplace
among 96 but it declined to 71st place in 2015.
Healthcare
Healthcare is most important for senior citizens. Out of total
Government’s spending on health it is 18.7% in Germany, 17.4% in Norway, 12.9%
in China, Nepal 7.9% and India 3.6% (Source – WHO). The survey of Health,
Ageing and Retirement in Europe found that
the poorest spent the highest share of their income on health
care and that out-of-pocket expenses were heaviest for the oldest, the less
healthy, and women.
An indicator to measure the affordability of health-care
services is out-of-pocket expenditure as a percentage of total health
expenditure. When out-of-pocket expenditures exceed a certain threshold,
they limit people’s access to healthcare. While out of pocket expenditure
in China is 34%, Srilanka 48%, Nepal 49%, it is 57% in India (source: WHO
National Health Account Database).
The main demand of TUI (P & R) is “full social security with
a decent retirement income for the senior citizens above the age of 60, public
healthcare, proper and decent housing, culture, leisure, access to public high
quality transport system at subsidized cost, healthy environment and special
care for disabled”. To achieve these objectives, unity of senior citizens
is the need of the hour.
Pakistan: From 1/7/2010, no medical reimbursement is allowed for
out-door treatment for pensioners. Instead 25% of net-pension is given as
medical allowance for non-gazetted and 20% for gazetted. From 1/7/15,
this medical allowance was increased by 25% (Source: GoP finance division OM.
dtd.7/7/15).
Bangladesh: A pensioner upto the age of 65 is getting 1500 taka
and above the age of 65 is getting 2500 taka as medical allowance.
Active Ageing
Globally 901 million senior citizens are there in 2015 which
constitutes 12.3% of total population. It is projected that the %age may
go to 21.5 in 2050. Senior citizens make an important contribution to the
fabric of society. The first significant attempt at the international
front was in the form of the World Assembly of Ageing in 1982 at Vienna by
-4-
UN. The Assembly said “the need is to make the old age
meaningful, contended and happy”. WHO in 1999 stated that
countries would become old if governments, international organizations and
civil society don’t adopt ‘Active’ Ageing’ policies and programmes that enhance
the health, participation and security of older citizens. The word
‘Active’ refers to continuing participation in social, economic, cultural,
spiritual and civic affairs.
Specific Policies Required
Providing basic social protection to older people is about
recognizing the right to a dignified old age as well as the need for financial
independence. Economic growth alone will not
improve old people’s wellbeing and specific policies need to be
put in place to address the implications of ageing. Mexico introduced
tax-financed social pensions to ensure everyone can look forward to a minimum
standard of income security in old age. Because of the rapid expansion of
social pension schemes in the past decade by Mexico 90% of people above the age
of 65 are now covered. Japan, a hyper-ageing country, with 33% of
population over 60 years of age adopted a comprehensive welfare policy in 1961,
introduced universal healthcare, a universal social pension, and a plan for
income redistribution. This investment has paid-off with a healthier
labour force and increased longevity. As a result, Japan is not just the
oldest, but also one of the healthiest and wealthiest countries in the world.
China has the largest population of older people in the world
with 209 million people (15% population is more than 60). It introduced
“Rural Social Pension Scheme” in 2009. Because of that scheme, 89 million
senior citizens received pension payment for the first time. In 2013
China amended a national law to protect the rights of older people, mandating
local governments to provide social security, medical and long-term care to
their senior citizens. Pension coverage has gone up to 75% and health
insurance coverage to nearly 90%. In spite of having economic and
political weight, relatively high Gross National Income (GNI) per capita,
Russia & India rank lower in the Index. Russia has wide pension coverage
but no national plan on ageing. Now it is being developed. South
Africa has social pensions and it is about 23% of the average salary.
Nepal’s income security is boosted by 56% pension
coverage. In Nepal, the senior citizens Act of 2006 was amended in 2013
and it has adopted treatment guidelines for delivering healthcare to older
people. Another neighboring country Srilanka’s long-term investments in
education and health have had a lifetime benefits for many of today’s older
population. Even in Bangladesh the status of senior citizens are better
than India.
Comparison with comparable countries
We do not want to compare here about the socio, economic status
of pensioners in developed countries or OECD countries because the background
& systems are different from India. We would like to compare the
status of pensioners with comparable countries more or less with the same
background.
The World Bank is categorizing the countries as ‘Developed’,
‘Developing’ ‘under-developed’ on the basis of Gross National Income per capita
per year using ‘purchasing power parity’ every year on 1st July.
If the GNI per capita per year is less than 11,905$ it is called a ‘Developing
Country’. As on 1/7/2015, India had 5630$, Afganisthan 2000$, Bangladesh
3330$, Srilanka 10300$, Nepal 2410$, Pakistan 5090$ & China 13170$ (source
–
World Bank). This reveals that the GNI in
Afganistan, Bangladesh, Nepal, & Pakistan is less than India.
Life expectancy at 60 for both sex in India, 76.7, Afganistan
75.7, Bangladesh 77.9, Srilanka 80.2, Nepal 77.2, Pakistan 77.5 & China
80.
The retirement age in India, Pakistan & Myanmar is 60,
Afganisthan 65, Bangladesh raised from 57 to 59, Srilanka 55 for men & 50
for women, Nepal 58, Bhutan 56 which will be increased gradually to 60 in 20
years & China 60 for Men & 55 for women.
According to 2006 World Bank Report, separate Civil Service
Pension Scheme is available in 7 countries of South Asia. Let us
understand the pension formula in our neighboring countries.
In Pakistan, Pay scale is revised at frequent intervals and not
once in 10 years like India. For example, it was revised in 2008, 2011
& 2015. There were 21.5 lakh pensioners in 2013. One is eligible for
pension after 10 years of service. For 10 years qualifying service it is
70/300, for 11 years 77/300 and so on. For 30 years of service pension is
granted at 70% of last 12 months average. Additional 2% is given for each
year of service beyond 30 and maximum is 10% (source: GoP Fin.Min order
dtd.1/7/86). Minimum pension from 1/7/2013 is Rs.5000/- & Family
pension is Rs.3750/-. There is no Dearness Relief but adhoc relief is granted
every year on 1stJuly. For example 20% was granted from
1/7/12, 10% from 1/7/13, 10% from 1/7/14 & from 1/7/15, 7.5% of basic
pension (source: GoP Finance Division OM dtd. 7/7/15). Subsidised medical
care (free in Govt. hospitals), subsidized housing & subsidized education
for children is given to pensioners. Discount prices are given in
Employee shops. 100% property tax exemption from Rent Income.
Commutation table at the next birthday of 60 and not at 61 as in India and its
restoration is after 15 years.
This was suddenly withdrawn on
29/2/2008. Pensioners’ Associations not only fought on the streets but
legally also. Ultimately Hon. Supreme Court of Pakistan delivered a
favaourable judgement on 31/3/2014 and it was restored on 7/7/2015. It is
noteworthy to mention here that Hon. Supreme Court of Pakistan quoted the
judgement delivered on 17/12/1982 by Hon. Supreme Court of India in D.S.Nakra
Vs UOI.
In Bangladesh total population in 2015 is 16,15,40,000 and 6.94%
is above the age of 60. There were 5.2 lakh pensioners. Here also
pay scale is revised frequently. In 45 years 8 pay commissions were
appointed. 7th Pay Commission recommendations were
implemented from 1/7/2009 and 8th Pay Commission
recommendations (presented to Government on 21/12/14) were implemented from
1/7/2015 (pay revision from 1/7/15 & Allowance revision from 1/7/16).
According to 8th Pay Commission Minimum Pay is 8250 taka
(earlier 4100) & Maximum Pay which was 40,000 rose to 78000 taka (1:9.45
ratio between minimum & maximum). As per 8thPC
recommendation pension is 90% of last pay drawn (earlier it was 80%).
Minimum pension is 2000 taka. Upto the age of 65, pension increase is 40% and
above 65 the increase is 50% (source: gazette notification dated
15/12/15). 20% of basic pension is given as ‘Festival Allowance’ thrice
in an year. Two times it is given to Muslims for their festivals, and for
Hindus for their festivals, Christians for their festivals etc. But one
is given to all on the eve of Bangla New Year (during April). Bangladesh
Bureau of statistics conducted a survey in June 2010 with the help of
Bangladesh Retired Govt. Employees Welfare Association whose president is
Mr.Abu Solaiman Chowdhry, former Cabinet Secretary. The survey covered
700 officers, 900 class III & 700 class IV employees. It revealed
that 88.48% of pensioners get less than 5000 Taka (Bangladesh currency) per month
(equivalent to Rs.4286 as per exchange rate on 21/5/16). 85% are living
alone. 28.25% pensioners are involving in some activities like Religious
(9.39%), Social (8.71%), Professional (2.43%), Cultural (1.91%), Political
(1.87%), NGO (1%), Sports (0.91%) & others 1.83%. Remaining 71.75%
are not involving in any such activities. Average monthly expenditure for
a pensioner & his/her family is 18,028 taka (food 44.37%, Medical 11.84%
etc). 64% of pensioners said that pension is not sufficient to meet both
ends.
In Srilanka, Public Servants Pension Scheme (PSPS) was
introduced in 1901. Total pensioners in March 2016 are 5,65,712.
37.9% of pensioners are getting less than Rs.20,000/- per month, 44.2% are
getting between 20,000 & 30,000 and 17.9% are getting above
Rs.30,000/-. The average monthly pension is Rs.16,675 (all Srilankan
currency). However it is not indexed to wages or prices. The
increase is on discretionary basis and it is below the rate of inflation on
average. Thus, the pension loses value in real terms. Mandatory
pension scheme is financed by the Govt. budget which is a Defined Benefit
Scheme. It covers permanent public sector employees, civil servants,
armed forces,
provincial & local government employees, government teachers
& judicial officers. One is eligible for pension on completion of 10
years of service. On completion of 30 years of service pension is 85% to
95% of last salary ( Lower scale of pay persons get more percentage and higher
scale of pay persons get less percentage). Pension is not taxable.
In addition, 24 months salary of last drawn is given as ‘commutation’ and for
this 10% is recovered from pension and it is restored after 10 years. In
the event of death, dependents are entitled to an unreduced pension. In
addition, the widows, widowers and orphans pension is a separate contributory
scheme that provides benefits to dependents of public sector workers who die in
service.
In Nepal, Civil Service Pension Scheme is applicable for civil
servants, Employees of Government-owned enterprises, Armed services, Teachers
of Government schools, Universities & Police. For pension
eligibility, minimum service required is 20 years but for army it is 16
years. The pension formula is Number of years of service X last pay drawn
divided by 50. It works out to 60% for a person with 30 years of service
and Rs.10000/- as LPD. Family pension is 50% of pension.
Contributory pension scheme, just like our National Pension Scheme, was
introduced on 15/7/2005. According to that, 10% shall be contributed by
the employee and similar contribution by Govt. Due to intense pressure
from Unions and Peoples’ movement it was rolled back in 2009.
In Afganisthan, pension is available to Civil servants,
Teachers, State-owned enterprises, Afgan National Army, Home Affairs, National
Directorate of Security. Under old pension scheme, employees have
to contribute 3% salary. Under New Pension Scheme which was introduced
from 17/9/2009 the contribution was raised to 8% and Govt. contributes same percentage.
Minimum service required for full pension is 40 years of service. Pension
is the last 36 months pay divided by 36. After the age of 65, for each
year 3% additional pension is added and the maximum is 80%. After the death
of the pensioner, the family shall get 36 months of pension as lump sum instead
of monthly family pension.
In Bhutan, National Pension & Provident Fund Plan (NPPFP) is
in vogue. It is contributory pension and each side contribute 8%.
Minimum qualifying service is 10 years. Pension formula is somewhat
cumbersome. Total pension points (PP) X 60% of Average Annual Civil
Service Salary Index (ACSSI) divided by full working period. PP = Annual
salary divided by ACSSI of the same financial year. ACSSI = Total civil
service salary divided by total service. Minimum is 30% of ACSSI and
maximum is 200% of ACSSI. Family pension is 50% of pension. It is
granted from the following month of death or the spouse reaches the age of 50
whichever is later.
In Myanmar, minimum
qualifying service required is 10 years. Pension formula is LPD X
qualifying service X 1.5%. It means, if one has more service he/she may
get more pension, if less service then less pension. For 30 years service
it is 45% of LPD, for 35 years it is 52.5% of LPD & for 40 years it is
60%. Family pensionis equivalent to pension.
Some may argue that all the above countries are small compared
to India. Let us consider China which is larger than India. In
China, pension is 65% of LPD for those who have less than 10 years service, 70%
for those who served between 10 & 20 years, 80% for those who served
between 20 & 30 years, 85% for those who served between 30 & 35 years
and above 35 years it is 90%. For military service <10 years = 65%, 10
to 15 years = 70%, 15 to
20 years = 75%, 20 to 30 years = 80% & above 30 years =
85%. For severely injured it is 95% of LPD (source: Stirling Finance
Research).
Pension Expenditure
In India, there was a population of 54,81,59,652 in 1971 and the
employees in formal sector (Central/State/Localbody/Quasi-govt. agencies &
Govt. companies) was 1,07,30,400 (1.96% of total population) and in 2011 the
population was 121,08,54,977 and the employees in formal sector was 1,17,34,000
(0.97% of total population). In 2012, the expenditure for retirement
benefits of Central Government employees is 4.42% of total expenditure
(Retirement expenditure includes not only recurring pension expenditure &
terminal benefits but also pension contribution for serving employees).
During the same period, All State Governments spent 10.19 of total expenditure
for the retirement benefits of State Govt. employees. In 2012-13 Kerala
spent 20.09% of total revenue for retirement benefits (highest among states).
Punjab comes second with 18.05%, Himachal in 3rd place with
17.61% & West Bengal in 4th place with
16.16%.
Organize under one umbrella
There are 45 countries in Asia. But affiliates for TUI
(P&R) are only from India, Nepal & Pakistan. There is a long way
to go and I expect that AIPRPA shall play its role in strengthening TUI
(P&R) in South Asia first. Pensioners of India cannot be complacent
that their pension is safe because of statutory guarantee. Many countries
including Pakistan have such statues but still pension is under attack in
various forms. According to PTI news, the present government at the
centre in India made an attempt recently to repeal Pension Act 1871.
Pensioners have to be vigilant and organized under an organization, if possible
under one umbrella. Once again I wish your conference all success and
congratulate the new office-bearers who would be elected in this conference.
(Speech by D.Gopalakrishnan,
Secretary,
Asia, TUI (P&R) at
Chennai.
