Poor performer in social sector, Gujarat government fails to take care of senior citizens: Report submitted to Pension Parishad

pensionA recent report “Old Age Pension Entitlements in India: A Factsheet”, prepared by Prashant Prakash of the Centre for Budget and Governance Accountability for Pension Parishad, has nailed the Gujarat government for  failing to take care of its senior citizens. The report says that Gujarat performs “poorly with lowest personal annual income of Rs 2,400 as eligibility for availing old age pension” and ranks among the lowest in terms of “state expenditure per elderly per month.” In case Gujarat were to implement universal pension for all its senior citizens, it would have to shell out increase its budgetary allocation by a whopping 1,097 per cent, the highest of all Indian states. Excerpts from the report:

Old age pensions (OAP) as a policy subject comes under the domain of concurrent list according to the Constitution of India. Hence OAP falls within the purview of both centre and state government in India. In line with this responsibility, while the Union government has formulated the Indira Gandhi National Old Age Pension (IGNOAPS) under a more comprehensive National Social Assistance Programme (NSAP), various states are implementing their own old age pension schemes. Within the IGNOAP, while centre provides Rs 200 per month as pension to elderly (aged above 59 years) belonging to below poverty line (BPL) family, based on the BPL survey conducted in 2002, it has asked the states to contribute matching of the exact amount per elderly to share the responsibility of OAP’s equally.

Pension provisions differ across states in terms of monthly pension amounts, minimum eligibility age, maximum income limit for eligibility etc. While Goa (Rs 2,000), Tamil Nadu (Rs 800), Andaman and Nicobar (Rs 2000), Puducherry ( Rs 1000) and NCT Delhi (Rs 1,000) are models for monthly pension amount, Jammu and Kashmir (55 F), Rajasthan (55 F, 58 M), Maharashtra (55 F), and Puducherry (56) could be models for the criterion based on minimum eligible age. Goa (no income criterion), Haryana (annual income of couples less than Rs 2 lakh), Daman and Diu (Annual income less than Rs 1 lakh) and NCT Delhi (Annual income less than Rs 60,000) have more liberal maximum income limit criteria for old age pension eligibility.

old age pensionPoor performers for monthly pension amount are Arunachal Pradesh (Nil), Assam (Rs 50), Meghalaya (Rs 50) and Mizoram (Rs 50). As regards minimum eligibility age, Andhra Pradesh (65 years) and Karnataka (65 years) have set high age limits, and Gujarat performs poorly with lowest personal annual income of Rs 24,000 as eligibility for availing old age pension. Goa, Rajasthan and Puducherry are the overall examples of best practice, but in terms of age Goa is a spoiler at a criterion set at 60 years and monthly pension amount of Rs 500.

Presently total Centre and States’ combined expenditure on old age pension is around Rs 14,370 crore a year (as of 2011-12 actual expenditure figures), with the Centre’s share of Rs 4,916 crore forming 34 percent of total expenditure, way short of the 50 percent sharing principle that a concurrent list subject like social security demands.

While around Rs 71,287 crore are required for universal old age pension at Rs 500 per month for all aged above 54 years, Rajasthan model demands around Rs 27,639 crore of additional expenditure over and above present expenditure of Rs 14,370 crore. Rajasthan can achieve this comprehensive old age pension scheme by increasing its 2011-12 pension expenditure by around 255 percent. While eight states (Goa, Haryana, Sikkim, Nagaland, Uttarakhand, Himachal Pradesh, Tripura and Mizoram) and two Union territories (Puducherry and NCT Delhi) are already incurring expenditures on old age pension more than what is required following Rajasthan, five states (Uttar Pradesh, Bihar, Jammu and Kashmir, Arunachal Pradesh and Gujarat) will require relatively higher increases in expenditure on pensions as proportion of present expenditure, with Gujarat at the highest.

Indian government (centre plus states combined) is at present incurring an expenditure of Rs 83.8 per month per elderly (aged above 54). Out of this, while the centre incurs expenditure of Rs 28.7, states incur expenditure of Rs 55. Comparing general (centre plus state) expenditure per elderly across states and UTs, Goa (Rs 446) ranks first, followed by Puducherry (Rs 435), Rajasthan (Rs 272), Haryana (Rs 260) and NCT Delhi (Rs 237). Among low ranking performers are Bihar (Rs 52), Arunachal Pradesh (Rs 48), Meghalaya (Rs 45), Jammu and Kashmir (Rs 38) and Gujarat (Rs 21).

old age pension1Looking at only centre’s expenditure per elderly, Tripura (Rs 66) ranks first, followed by Nagaland (Rs 61), Mizoram (Rs 60), Bihar (Rs 52), Sikkim (Rs 51), and Arunachal Pradesh (Rs 48). Kerala (Rs 10), Gujarat (Rs 10), Punjab (Rs 9), Chandigarh (Rs 8) and Goa (Rs 0.4) are low ranking in term of centre’s expenditure per elderly.

For exclusively state level expenditure per elderly per month, Goa (Rs 445) ranks first, followed by Puducherry (Rs 409), Rajasthan (Rs 251), Haryana (Rs 245) and NCT Delhi (Rs 225). Assam (Rs 17), Gujarat (Rs 11), Bihar (Rs 3), Meghalaya (Nil) and Arunachal Pradesh (Nil) rank among the lowest in terms of only state expenditure per elderly per month.

While Goa leads the way with no income criteria and universal old age pension, other states that have a relatively higher income criteria are Haryana (Annual income limit of Rs 2 lakh for couple), Maharashtra (income limit Rs 21,000) and Karnataka (couple income limit Rs 20,000). While most of the states follow the BPL criteria for determining the eligibility, Gujarat performs poorly with lowest personal annual income limit of only Rs 2,400.

Punjab and Kerala, although doing fairly well in terms of state contribution, ranks lower because of less central contribution compared to other high ranking states. Tripura, Odisha, Uttarakhand, Chhattisgarh and Jharkhand would have not high ranks due to their coverage issues. Among low ranking states Uttar Pradesh, Bihar, Arunachal Pradesh and Meghalaya would have ranked even lower than Gujarat had it not been for relatively higher coverage provided by centre. Gujarat’s poor performance is explained by low fund transfer from centre to state according to BPL, which in turn has low matching contribution by the state as its pension programme is synced with IGNOAPS.

old age pension2At the state level, Rajasthan has the highest expenditure on old age pension (41 per cent) as proportion of expenditures on pension and retirement benefits for state government employees. This is followed by Puducherry (33 per cent), Goa (33 per cent), Haryana (28 per cent) and Karnataka (21per cent) as top five states. Hence, though Rajasthan ranks lower than Goa and Puducherry in terms of coverage and expenditure per elderly, it ranks better in terms of relative equality of old age security enjoyed by elderly across non-government and organized government sectors.

On the other hand, Gujarat (1.5 per cent), Jammu and Kashmir (1.2 per cent), Nagaland (0.9 per cent), Bihar (0.7per cent), Meghalaya (0per cent) and Arunachal Pradesh (nil) incurred among the lowest expenditure on old age pensions as proportion of expenditures on pension and retirement benefits on government employees. Sikkim (8 per cent) and Tripura (5.3 per cent) although rank comparatively higher in terms of expenditure per elderly, ranks lower in terms of expenditure on old age pension as proportion of expenditure on pension and retirement benefits.

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