Business Standard

Elderly in India to triple by 2050

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Our Economy Bureau New Delhi
India's population above the age of 60 is expected to nearly triple by 2050, which coupled with a shrinking labour force will put pressure on public expenditure on pension.
 
This is because the number of retirees will be much more than that of contributors to pension funds, the Escap survey said. The report pointed out that the population above the age of 60 was expected to shoot up to 20.1 per cent in 2050 from 7.6 per cent in 2000. In addition, the share of working population between the age-group 15-60 is expected to fall from 62 per cent to nearly 59 per cent.
 
It added that India was better off than China, where the population above the age of 60 was expected to be close to 30 per cent, and the working-age population would be even lower than 55 per cent by 2050.
 
The report said the Asia-Pacific region in the next 50 years would see a disturbing trend of rapid ageing in developing countries. According to the report, the population above the age of 60 will more than double to 23.5 per cent in the next 50 years.
 
The report said in absence of effective institutions, procedures, rules and regulation for addressing issues related to old age, people in developing economies would face more complex problems than those of the developed nations.
 
"Developing countries have a large proportion of poor, older people working in the informal sector. They do not have the support of any formal pension system," the report said.
 
The report recommended a combination of publicly-managed pension funds on equity basis, privately-managed and funded contributory schemes for working class, and additional retirement schemes for voluntary contributions, instead of the simple "pay-as-you-go" pension funds that accumulated the financial burden. Such a system would make pension schemes financially sustainable and function as an anti-poverty measure, the report said.
 
On the social front, the report suggested encouraging the private sector to develop alternate social security schemes such as health insurance.
 
It also suggested that liberalisation of labour market should be done to take care of increasing demand for labour, which could not be met by domestic population. It said a fresh look at the WTO's General Agreement on Trade in Service was required to facilitate migration of labour.

 
 

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First Published: Apr 26 2005 | 12:00 AM IST

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