THE CASE FOR A UNIVERSAL OLD-AGE PENSION
The vast majority of India’s labour force of nearly four hundred eighty million is employed in the informal sector, which is characterised by insecurity of employment, poor working conditions and absence of social security. This is where the self-employed, such as small farmers and entrepreneurs, artisans, street vendors and rickshaw pullers, are clubbed together with wage workers in farms, unorganized enterprises and households. The formal, organized sector, which includes the state and its instrumentalities, the corporates and large not-for–profit organizations, has a poor track record of creating employment opportunities. The annual accretion to the labour force is willy-nilly accommodated in the informal sector, where the entry barriers are much lower than in the formal sector.
The informal sector, which is estimated to employ ninety-four percent of the nation’s labour force and contribute roughly forty percent of its gross domestic product, has suffered from a chronic policy deficit. The issues of concern to the formal sector have occupied all the mind space of the policy establishment, which is hardly surprising in view of its provenance, affiliations and vested interests.
Our policymakers are indifferent to the abysmal levels of productivity and working conditions in the informal sector and the crying need of public investment in its physical infrastructure and social capital. How can one then expect them to care about the lot of those, who, for reasons of age, infirmity, or technology-induced redundancy, are no longer able to earn their livelihood in the informal sector? It is conveniently assumed that the Indian system of joint family with its tradition of respect and care for the elderly will provide a safety net for them.
Sadly, the reality is quite different. The traditional familial support system is under serious threat from changing societal values and economic compulsions, as well as demographic factors. Retirement for workers of the informal sector usually means poverty, privation and loss of independence and individual dignity. The opportunities for the elderly to engage in remunerative activity and contribute to the family income are becoming increasingly scarce due to the ongoing structural changes in the economy. At the same time, the virtual withdrawal of the state from the health sector and the resultant collapse of the public health care system have dealt a body blow to this vulnerable group.
The schemes drawn up from time to time by the central and state governments for the benefit of various disadvantaged categories are for most part an exercise in tokenism, providing but a pittance as pension. These sporadic initiatives do not reflect any intent to address the problem of destitution by fashioning a comprehensive social security system. The prolonged labours of the National Commission for Enterprises in the Unorganised Sector have culminated in the promulgation of the Unorganised Sector Workers’ Social Security Act, 2008, which is only an enabling legislation that does not seek to confer any right to social security coverage.
Under the circumstance, it is inevitable that the demand for a pension that is capable of sustaining informal sector workers after their active years should gain ground and become a rallying point for the growing numbers of the elderly, who are callously pushed to the margins of society. They can expect to be heard by the powers that be when their mobilization attains the critical mass to influence their electoral calculations.
The basic features of an ideal old-age pension scheme have been a matter of debate and ideological contestation. Should the old-age pension be means-related or universal in its coverage? Should it be contributory or non-contributory? A universal, non-contributory pension scheme, though theoretically more onerous in terms of outgo, would have the advantage of eliminating the hazards of administrative overload, bureaucratic arbitrariness and wrongful inclusion and exclusion that generally afflict targeted welfare schemes. However, the exclusion of privileged groups, such as income tax payers and pensioners of the organized sector, should not pose any problem from a moral or administrative standpoint.
The argument that such a measure will impose an unbearable burden on the public exchequer and aggravate the fiscal imbalance is a specious one. The right to adequate means of sustenance is a concomitant of the fundamental right to life that is guaranteed by the Constitution. It is for the state to find the resources needed to actualize this right. A wide range of options is available to it: augmenting taxes, user charges and royalties, curbing wasteful expenditure and tax evasion, improving the performance of public undertakings, discontinuing a whole gamut of non-merit subsidies and unwarranted concessions to big business, among others. The state also has the option of asking the intended beneficiaries during their employment to contribute their mite to this effort of resource mobilization.
The campaign for a universal old-age pension is being led by the fledgling Pension Parishad, which has embarked on its first flight by holding an impressive five-day dharna during 7-11 May at Jantar Mantar in the national capital. The coming together of thousands of wizened toilers from all parts of the country to lay a claim to a life of dignity in their twilight years was no ordinary event. Certain sections of the national media did extend their coverage to it, but the powers that be did not deign to take any notice. It is going to be a challenging task to keep the issue in public focus till the policy establishment is moved to concede the demand. Common Cause will be happy to lend its support in this undertaking.
- Kamal Kant Jaswal