Improving economic security for older persons by public pension schemes: evidence from National Transfer Accounts for India

Abstract

This paper develops a framework for analysis of distribution related policy issues (i.e. inequality, poverty and inequity) for ensuring economic security for India’s older persons by the public old-age pension systems with special reference to Indira Gandhi National Old Age Pension Scheme (IGNOAPS). The analysis is focused on (a) measurement of age-specific and intra-generational inequity by Lifecycle Deficit in the framework of National Transfer Accounts (NTA), (b) relationship between this inequity and poverty and inequalities in distribution of income and consumption and (c) role of current public funded IGNOAPS to improving economic security or reducing inequity for the elderly generation. The entire analysis is based on the benchmark year 2004–05 and a comparative analysis between 2004–05 and 2011–12. Main results show (a) remarkable age and intra-generational patterns for the older persons in labour income, consumption, income and consumption inequalities, consumption poverty and inequality-adjusted inequity and (b) efficacy of poverty-linked universal IGNOAPS to improve economic security or reducing the inequity for the older persons at a national cost of less than 0.20% of total revenue or consumption expenditure of Government of India. These results offer empirical evidence for design and implementation of redistributive policies for the older persons by integrating the objectives of reduction in economic inequalities, poverty and inequity. Such policies have wider implications for attainment of select UN-SDG goals, especially goals related to age-specific reduction in poverty and inequalities. The approach, results and implications of this paper are of general relevance for other developing countries in Asia and Africa if their economic policies aim at improving economic security of the older person in the framework of NTA methodology.

Investment in National Pension Scheme: Issues and Trends

“…⮚ The policy instruments are generally redistributed to BPL families who are facing a lack of economic security. These policies for retirement not only cover economic support but also provide social security benefits and also financial stability [28].…”