Income Support for Vulnerable Groups: India

Income Support for Vulnerable Groups: India Symposium on Income Security for Older Persons in South Asia February 27, 2017 Under the Aegis of UN-ESCAP Mukesh Anand National Institute of Public Finance and Policy New Delhi, India mukesh_anand@hotmail.com; mukesh.anand@nipfp.org.in

Plan of the Presentation Brief characterisation of India income (average), population (old, young), workers, poor (slides 3-5) Social Security: Imperative, Objective, Management, Sustainability (slides 6-13) Social programmes (slides 14-17) Non-contributory (PAYG) pensions in the public sector (slides 18-19) Contributory provident fund and pensions applicability, coverage, beneficiaries, benefits (slides 20-23) Summary (slides 24-27) Suggestions for way forward (slide 28)

India: Income, Population National Income, Exchange Rate 2011-2 2014-5 GDP at Current Prices, billion INR (trn USD) 87360 (1.82) 124882 (2.04) Population (million) 1220 1267 Per Capita GDP in INR (USD) 71606 (1494) 98565 (1612) Nominal Exchange rate, Average INR per USD 47.923 61.143 Population Characteristics, 2011 Census Proportion (%) of All ages Proportion (%) of > = 65+ years Proportion (%) of > = 60+ years Proportion (%) < 14 years Proportion (%) < 19 years Proportion (%) of All Ages 51.47 M 48.53 F 2.67 M 2.79 F 4.72 M 4.36 F 14.96 M 13.71 F 20.44 M 18.55 F 69 Rural 31 Urban

Population Pyramid, 2011 A 100+ 0.03 0.02 g 0.03 0.02 90-94 0.07 0.05 e 0.10 0.09 80-84 0.27 0.24 0.39 0.37 I 70-74 0.79 0.80 1.12 1.07 n 60-64 1.57 1.54 1.63 1.61 t 50-54 1.92 2.13 2.49 2.65 e 40-44 2.88 3.10 3.49 3.54 r 30-34 3.63 3.69 v 4.14 4.24 20-24 4.45 4.76 a 4.67 5.28 10-14 5.23 5.73 l 5.01 5.48 0-4 4.47 4.84 7.50 5.00 2.50 0.00 2.50 5.00 7.50 Percent Male Female 100+ 0.01 0.00 90-94 0.03 0.03 0.06 0.05 80-84 0.08 0.08 0.22 0.22 0.32 0.32 70-74 0.70 0.73 60-64 1.00 0.92 1.35 1.32 50-54 1.37 1.32 1.63 1.93 40-44 2.19 2.42 2.51 2.90 30-34 3.36 3.50 3.59 3.63 4.07 4.04 20-24 4.22 4.50 10-14 4.50 5.24 5.76 6.38 0-4 5.99 6.49 5.18 5.55 7.50 5.00 2.50 0.00 2.50 5.00 7.50 A g e I n t e r v a l Population Pyramid, 2001 Percent Male Female 100+ 0.01 0.01 90-94 0.02 0.02 0.05 0.05 80-84 0.06 0.07 0.23 0.25 0.24 0.25 70-74 0.60 0.66 60-64 0.76 0.77 1.29 1.42 50-54 1.26 1.30 1.69 2.02 40-44 2.05 2.26 2.35 2.72 30-34 2.96 3.29 3.40 3.57 4.14 4.12 20-24 4.41 4.47 10-14 4.39 5.04 5.57 6.19 0-4 6.42 6.85 5.96 6.24 7.50 5.00 2.50 0.00 2.50 5.00 7.50 A g e I n t e r v a l Population Pyramid, 1991 Percent Male Female Population Pyramid, 1981 A 100+ 0.01 0.01 g 0.01 0.01 90-94 0.04 0.03 e 0.05 0.05 80-84 0.20 0.20 0.23 0.24 I 70-74 0.60 0.63 0.71 0.72 n 60-64 1.32 1.41 1.19 1.28 t 50-54 1.74 2.07 1.95 2.36 e 40-44 2.43 2.71 2.85 2.99 r 30-34 3.13 3.24 v 3.75 3.87 20-24 4.26 4.36 a 4.53 5.11 10-14 6.11 6.80 l 6.83 7.26 0-4 6.21 6.32 7.50 5.00 2.50 0.00 2.50 5.00 7.50 Percent Male Female

India (2011-2): Workers, Households, Poverty Description Figures Region Number of Labourers, Workers, Unemployed per 1000 persons NSSO 68 th Round, July 2011-June 2012 Propn. of Labourers (M,F); Workers (M,F) (per cent); e.g 55 (25) per cent of males (females) in rural areas were labourers Out of Workers those that are Self Employed, Regular Wage / Salaried, Casual labour M;F denotes Potential Coverage Average Household Size (persons) Female Headed Households (per cent) Poverty Line, Monthly Per Capita Expenditure, INR 2011-2 (USD) Proportion (%) and Number (mn) of Poor 406, 399, 17 Rural 367, 355, 34 Urban 395, 386, 22 Total (55,25); (54,25) Rural (56,16); (55,15) Urban (55,10,36); (59,6,35) Rural (42,43,15); (43,43,14) Urban 4.5 Rural 4.0 Urban 4.3 Total 12 Rural 12 Urban 816 (17.03 USD) Rural 1000 (20.87 USD) Urban 25.7 %, 216.5 mn Rural 13.7 %, 52.8 mn Urban 21.9 %, 269.3 Total

Social Imperative Higher incidence of poverty and destitution among old or aged resulting from individuals myopia are unable to foresee decline in earnings capability and thus may not insure for old-age consumption requirements by saving from income when young Increased risk perception vulnerability despite growth in incomes inadequate savings (longevity risk); episodic expenses (health / morbidity risk); isolation, nuclear families (empty nest, physical security risk);

Core Objectives Poverty relief anti-poverty measures Consumption smoothing income replacement Insurance supplementary benefits

3-tier or 3 Pillar approach Tier 4: Informal intrafamily, intergenerational financial and non-financial support Tier 3: Personal insurance: Voluntary, Fully Funded, Savings, Taxed at normal rates Tier 2: Savings and Co-insurance: Personal Savings or Occupational Plans, Regulated, Mandatory, Funded, Taxed at lower or reduced rates Tier 1: Redistributive: Mandatory, Minimum Pension, Flat, Payroll / Tax financed, Tax exempt Tier 0: Basic income, Anti life-time poverty

Managerial (Administration) Arrangement Public (Social) programmes National Social Assistance Programme (NSAP) Swatantrata Sainik Samman Pension Senior Citizen Savings Scheme (SCSS): 0.5 per cent higher interest on deposits by / for the elderly Non-contributory programme Government (Employer) sponsored programmes - Civilian employees [also covering public sector corporations (including banks)] who joined before January 01, 2004, defence employees Co-contributory (Employer Employee) programmes Civilian employees (NPS) joining service on or after January 01, 2004 EPF&MP, CMPF&MP, J&KEPF, SPF, ATPPF&PFS, NPS-private, NPS-lite (Swavlamban, Atal Pension Yojana) Personal savings and annuity plans GPF, PPF, NPS-Private - savings-investment in long-term schemes managed by fund managers (under PFRDA oversight)

Financing and Regulation Pension funds long term debt market consolidation of the capital market improved corporate governance and corporate social responsibility Regulation of pension fund, its organisation, its investments, consumer grievances, regulator as a guarantor of fairness and justice

Sustainability ratios Passivity ratio (number of years in retirement : number of years in work) Replacement ratio (Pension : Wages) Dependency ratio (demographics) population, system (number of retirees : number of workers)

Y e a r 2011 2001 1991 806 597 687 730 949 996 Age-dependency Ratio Persons in age-groups 0 14 and 60+ Persons in age-group 15-59 1981 783 1082 0 200 400 600 800 1000 1200 0-19 & 65+ 0-14 & 60+ 2011 7.3 10.1 Y e a r 2001 1991 7.9 8.5 10.7 12.3 Persons in age-group 15-59 Persons in age-group 60+ Support Ratio 1981 12.8 8.6 0 2 4 6 8 10 12 14 19-64 14-59

Economic Dependency Ratio Census National Sample Survey Office Year Dependents Per 1000 Workers Year Dependents Per 1000 Workers PS + SS PS (1) (2) (3) (4) (5) 1961 1328 1977-8 1364 1695 1971 2037 1983-4 1381 1674 1981 1725 1987-8 1427 1740 1991 1667 1993-4 1381 1667 2001 1558 1999-00 1519 1740 2011 1513 2003-4 1375 1625 2009-10 1551 1740 2011-2 1591 1825

National Social Assistance Programme (NSAP), Dec 2015 Below Poverty Line (BPL) Households: Eligibility for Benefits Benefits Scheme Periodicity Beneficiaries Beneficiary (INR) Other Conditions Age (1) (2) (3) (4) (5) (6) Indira Gandhi National Old Age Pension Scheme (IGNOAPS) Indira Gandhi National Widow Pension Scheme (IGNWPS) Indira Gandhi National Disability Pension Scheme (IGNDPS) National Family Benefit Scheme (NFBS) a. >= 60 and =< 79 monthly b. >= 80 a. >= 40 and =< 79 monthly b. >= 80 a. >= 18 and Severe / multiple (80%) =< 79 monthly disability b. >= 80 18 =< Age at death of One-time primary bread winner =< 59 lump-sum a. 200 b. 500 22.98 mn a. 300 b. 500 6.33 mn a. 300 b. 500 1.09 mn 20000 0.29 mn Annapurna Scheme (AS) >= 65 Those not covered under OAPS monthly 10 kgs. of foodgrain 0.93 mn

Scheme-wise Beneficiaries from NSAP Schemes, mn Scheme IGNOAPS IGNWPS IGNDPS NFBS Annapurna Year Scheme 2011-2 21.38 3.63 0.79 0.33 0.78 2012-3 22.71 4.96 1.09 0.39 0.82 2013-4 22.33 6.20 1.58 0.28 0.78 The Difference of Total, from the Sum of Female and Male, constitute the Transgenders 2014-5 22.98 6.33 1.09 0.29 0.93 Sanctioned Pensioners and New Applicants Scheme Status Gender Age Total Female Male < 80 >= 80 IGNOAPS Sanctioned 12051474 12104663 24157466 20937953 3219419 New Appl. 32544 42468 75020 69400 5620 IGNWPS Sanctioned 6941972 165 6942221 6801204 140953 New Appl. 25175 2 25181 25051 130 IGNDPS Sanctioned 349614 643761 993581 983471 10110 New Appl. 954 2571 3529 3517 12

Details of Freedom Fighters Pension (Swatantrata Sainik Samman Pension Scheme) Sl. No. Category of freedom fighters or their kin Total pension (per month) before enhancement Total pension (per month) w.e.f. 15 August, 2016* i ii Ex-Andaman political prisoners/spouses Freedom fighters who suffered outside British India (other than Indian National Army (INA)) / spouses 24 775 30 000 23 085 28 000 iii Other freedom fighters (including INA) 21 395 26 000 iv Dependent Parents (each) / Each unmarried and unemployed daughter (up to three) 3 380 (dependent parents) 5 070 (daughters) 50% of the sum that would have been admissible to freedom fighter i.e. in the range of 13 000 to 15 000

Year (Apr Mar) Swatantrata Sainik Samman Pension (As on December 31) Beneficiaries Nos. Expenditure INR bn Railway Passes INR mn Home Repair INR mn 2004-5 169331 3.5 511.10 0.67 2005-6 169945 3.74 314.45 0.50 2006-7 169969 4.25 293.43 0.50 2007-8 170200 5.88 294.79 0.50 2008-9 170545 6.41 50.00 0.60 2009-10 170673 8.25 349.80 2.00 2010-1 171148 7.11 302.83 1.10 2011-2 171411 8.21 156.70 0.30 2012-3 171516 7.73 255.00 1.00 2013-4 171578 8.26 86.66 2.30 2014-5 171582 7.84 2015-6 171595 7.90

Year Pub. Sect. Workers (millions) Population (millions) Col. 2 / Col. 3 * 1000 (1) (2) (3) (4) 1961 7.05 439.23 16 1971 10.73 548.16 20 1981 10.91 683.33 16 1991 12.84 843.39 15 2001 12.95 1,028.74 13 2011 11.73 1,210.86 10 Government Trend Growth Rate Retirement Benefits / Tot. Expenditure 1987-8 to 2014-5 1987-8 2014-5 Federal 16.50 2.08 5.01 All Provinces Combined 18.95 3.00 9.59 Public Sector Workers Structure of Employees Cost to Establishment, (Federal Government) Compensation Structure (per cent) 100 95 90 85 80 75 70 65 60 1950-1 1955-6 1960-1 1965-6 1970-1 1975-6 1980-1 Year 1985-6 Pension Wages Expenditure on Retirement Benefits, % 1990-1 1995-6 2000-1 2005-6 2010-1

States TGR Pensions (1987-8 to 2013-4, 2014-5) Pensions / Total Revenue (1987-8, 2014-5) Andhra Pradesh 17.94 17.78 3.80 10.01 Bihar 20.17 20.02 3.36 13.47 Goa 21.01 20.81 2.47 8.58 Gujarat 17.48 17.39 3.43 9.99 Haryana 19.69 19.51 2.84 11.28 Karnataka 15.86 15.93 5.43 9.72 Kerala 16.94 16.83 11.54 19.42 Madhya Pradesh 18.22 18.18 2.73 7.97 Maharashtra 18.20 18.10 3.06 8.62 Orissa 21.18 20.94 2.76 11.26 Punjab 20.02 19.77 4.14 18.58 Rajasthan 19.21 19.10 3.01 10.54 Tamil Nadu 19.18 18.94 4.74 14.17 Uttar Pradesh 21.91 21.76 2.25 11.59 West Bengal 20.33 20.00 3.48 14.02 Arunachal Pradesh 22.32 22.26 0.60 5.26 Assam 20.87 20.76 1.85 13.72 Himachal Pradesh 20.52 20.24 3.84 16.33 Jammu and Kashmir 22.31 21.94 2.65 12.74 Manipur 20.60 20.46 1.66 11.68 Meghalaya 21.18 21.03 0.96 8.01 Mizoram 23.60 23.56 1.08 9.89 Nagaland 20.01 20.02 1.99 11.83 Sikkim 25.80 25.75 0.44 7.46 Tripura 19.89 19.53 1.77 9.06

Scope and Mandate of Provident / Pension Funds in India Legislation / Act Applicability Members Corpus (INR bn) (1) (2) (3) (4) Employees Provident Fund and Miscellaneous Provisions (EPF&MP)Act, 1952 The Coal Mines Provident Fund and Miscellaneous Provisions (CMPF&MP) Act, 1948 The Seamen s Provident Fund (SPF) Act, 1966 The Assam Tea Plantation Provident Fund and Pensions Fund Scheme (ATPPF&PFS) Act, 1955 The Jammu & Kashmir Employees Provident Fund (J&KEPF) Act, 1961 The Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013 187 Industries (except in Jammu & Kashmir) employing 20 or more people 913 Units in private and public sector Seamen engaged in shipping industry (merchant navy) All tea estates or tea gardens Workers in Jammu & Kashmir province in non-pensionable service (a) The National Pension System (b) Pension Schemes not Regulated under any Other Acts As on 31/03/2015 PF: 158.47 mn PF: 6209 PS: 117.81 mn PS: 2385 DLI: 157 As on 31/12/2015 0.417 mn As on 31/03/2016 67742 PF: 13.65 900184 As on 31/03/2015 PF: 60.91 PS: 0.16 DLI: 1.16 As on 31/03/2016 Total: 12.236 mn CG: 1.658 mn SG: 2.924 mn Pvt. Sect.: 0.689 mn NPS-Lite: 6.965 mn

Scope and Mandate of Provident / Pension Funds in India Legislation / Act Applicability Members Corpus (INR bn) (1) (2) (3) (4) Employees Provident Fund and Miscellaneous Provisions (EPF&MP)Act, 1952 The Coal Mines Provident Fund and Miscellaneous Provisions (CMPF&MP) Act, 1948 The Seamen s Provident Fund (SPF) Act, 1966 The Assam Tea Plantation Provident Fund and Pensions Fund Scheme (ATPPF&PFS) Act, 1955 The Jammu & Kashmir Employees Provident Fund (J&KEPF) Act, 1961 The Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013 187 Industries (except in Jammu & Kashmir) employing 20 or more people 926 Units in private and public sector Seamen engaged in shipping industry (merchant navy) All tea estates or tea gardens Workers in Jammu & Kashmir province in non-pensionable service (a) The National Pension System (b) Pension Schemes not Regulated under any Other Acts As on 31/03/2013 PF: 88.76 mn PF: 4367 PS: 80.8 mn PS: 1834 DLI: 121 As on 31/12/2013 0.414 mn As on 31/03/2013 52855 PF: 10.15 808002 As on 31/03/2012 PF: 49.31 PS:.048 DLI: 0.89 As on 31/03/2014 Total: 6506180 481.4 CG: 1357589 241.9 SG: 1991455 202.1 Pvt. Sect.: 341109 28.9 NPS-Lite: 2816027 8.4

EPF&MP, 1952 CMPF&MP, 1948 Contribution, Pensioners, and Benefits Contribution (%) Avg. Annual Scheme Pensioners Ben. in INR Total Pension Fund (USD) (1) (2) (3) (4) (5) 8.33 (or max. of INR Member, 3.57 Employer: 13.61 15000 per annum) mn Seamens Provident Fund, 1966 ATPPF&PFS, 1955 PFRDA, 2013 Employee: 12.00 Survivor, 1.53 CG: 1.16 1.16 mn Employer: 12 Employee: 12 CG: 1.66 (or max. of INR 3200 per annum) Employer: 12 Employee: 12 0.417 mn 14130 (231) Employer: 12 Member Employee: 12 11604 47151 (771) CG: 1.16 (a) CG, SG, Pvt. Sect. Employer: 10 Employee: 10 (a) NPS-Lite CG.: INR 1000 pa for 2009-10 to 2019-20 Worker: 12000 pa Survivor 19867 4542 (74)

EPF&MP, 1952 CMPF&MP, 1948 Contribution, Pensioners, and Benefits Contribution (%) Avg. Annual Scheme Pensioners Ben. in INR Total Pension Fund (USD) (1) (2) (3) (4) (5) 8.33 (or max. of INR Member, 2.97 Employer: 13.61 6500 per annum) mn Seamens Provident Fund, 1966 ATPPF&PFS, 1955 PFRDA, 2013 Employee: 12.00 Survivor, 1.43 CG: 1.16 1.16 mn Employer: 12 Employee: 12 CG: 1.66 (or max. of INR 3200 per annum) Employer: 12 Employee: 12 0.413 mn 11728 (216) Employer: 12 Member Employee: 12 22870 28945 (604) CG: 1.16 (a) CG, SG, Pvt. Sect. Employer: 10 Employee: 10 (a) NPS-Lite CG.: INR 1000 pa for 2009-10 to 2102-3 Worker: 12000 pa Survivor 17983 4725 (99)

Summary: Programmes for income support for elderly Non-contributory NSAP for elderly, widowed, and disabled; Freedom Fighters Public sector workers in service before January 01, 2004, defence workers (defined benefit that is wage and inflation indexed) Contributory Mandatorily applicable to workers in private sector and public sector (excluding defence workers, and joining service on or after January 01, 2004) co-contributed by employee and employer Voluntary participation - with employee-employer co-contribution under EPF&MP and PFRDA with only own contribution in PPF, NPS-Lite (Swavlamban), NPS-Private

Summary: Beneficiaries, Expenditure, Benefits, 2012-3 Pension Type Beneficiaries Public Expenditure Benefits NSAP ~ 2.4 % of Popln < 0.70 % of Tot. Pub. Exp (C + S) < Rural Poverty Line (816) per month SSSPS ~ 0.01 % of Popln 0.05 % of Federal Govt. Exp INR 48148 per annum Non-contributory ~ 1.25 % of Popln 7.2 % of Tot. Pub. Exp (C + S) > Annual Per capita GDP Contributory ~ 4.25 % of Popln < 0.1 % of Federal Govt. Exp. < Poverty line (from EPFO)

Age-Groupwise Percentage Distribution of Workers and Pensioners (Federal Government) Age Groups in Years All Civil Defence % Nos. in Lakh % Nos. in Lakh As on 01.01.2014 Workers 20 and < 30 22.4 30 and < 40 22.3 40 and < 50 26.0 50 and < 60 28.7 Others 0.6 > 60 and < 70 37.2 47.2 33.02 (of which 21.88 are pre-01-01-04) (Post-01-01-04 34 %) 19.2 Pensioners > 70 and < 80 25.5 30.8 16.0 > 80 and < 90 8.9 10.7 33.36 (7.01 Family About 21 %) 5.5 18.6 (4.82 Family About 26 %) > 90 and < 100 2.3 2.2 2.3 Others 26.2 9.0 56.9

Summary System dependency ratio in public sector exceeds 1 (more retirees or pensioners than workers) Age dependency ratio (for India) appears favourable, but economic dependency (nonworkers to workers ratio) has not shown any improvement. Social pensions cover less than 12 per cent of poor. Social pensions are markedly deficient to address poverty. Labour employment in Public sector has declined And, New civilian recruits moved out of PAYG system to contributory system. Optimistic estimate for coverage under any provident fund / pension system is less than 15 per cent of workforce But, most contributory systems are inadequately funded or inadequately protected. High replacement ratio for those in PAYG, but very low for those in contributory systems. Expectation of life has improved (decline in fertility rate, decline in mortality) Further, expectation of life at older ages has risen more With unchanging age of superannuation, this raises the passivity ratio (number of years in retirement / number of years at work).

Tentative Suggestions on the Way Forward To reduce errors of omission and commission With current allocation of resources type-i error (error of omission, exclusion of eligible) is high. But type-ii error (error of commission, inclusion of ineligible) is also high because of inadequate socio-economic mapping. At this stage, resist temptation to convert all in-kind benefits into cash benefit / income transfer Benchmark social pensions (assistance) to poverty line (say, at least at 2/3 rd of poverty line) Pare / rationalise benefits under the PAYG system track life time cost of employee incentivise complete shift to contributory system Encourage work force participation raise mandatory age of superannuation (?) synchronise with expectation of life at average age of joining work

Summary: NSAP- Coverage, Funding, and Benefits Upon comparing the number of beneficiaries with potentially eligible poor persons, the coverage under OAPS (22.7 million) appears to be satisfactorily close to target (22.8 million). However, coverage in WPS (4.9 million) appears to have surpassed target (3.9 million), while coverage in DPS (0.74 million) seems significantly below target (5.9 million). NSAP covers almost 2.4 per cent of the population, but total expenditure on this programme is unlikely to exceed 0.70 per cent of the combined expenditure of federal and provincial governments. It appears that NSAP may be afflicted by high probability of errors, both of Type I (of omission of deserving persons) and Type II (of inclusion of undeserving persons). Total (federal plus provincial) assistance provided to individual beneficiaries, in several provinces falls significantly short of even the rural poverty line of INR 816 (monthly per capita expenditure).

Summary: Non-contributory Schemes - Coverage, Funding, and Benefits The non-contributory pension programme covers a large section of public sector workers constituting less than 2.5 per cent of extant 463 million Indian workers. Average annual pension benefit in the public sector exceeds per capita GDP. Retirement benefits for public sector ex-workers account for more than 7.2 per cent of combined public expenditure of the federal and provincial governments. Some provinces namely, Kerala, Himachal Pradesh, Punjab and West Bengal are facing an acute burden on account of expenditure on retirement benefits that exceed one-sixth of their total expenditure. In 19 provinces, out of 28 in 2012-3, expenditure on retirement benefits exceeded interest payments, and emerged as the most critical element of public expenditure.

Summary: Contributory Schemes - Coverage, Funding, and Benefits Domain oversight over contributory schemes is exercised under different legislations that are specific to employees in a region or sector (for example, J & K, Coal Mines, Assam Tea Plantations, Seamens etc.). Most of these face a decline in membership. Only contributory schemes under the oversight of EPFO and PFRDA report a rise in membership. A careful reading of legislative domains for the contributory schemes suggests that these effectively exclude self-employed and casual labourers from its ambit of mandatory participation. The objective of social security is ill-served by continuing with a plethora of legislations when membership in sector / region specific provident funds is dwindling, but the workforce has expanded considerably. There appears to be a strong case to consolidate the region and sector specific provident fund legislations under some umbrella legislation that may offer protection to a wider work-force.

Classification of workers by type and region of employment, and Gender Description Rural Urban Male Female Male Female Self Employed 55 59 42 43 Regular Wage / Salaried 10 6 43 43 Casual Labour 36 35 15 14 Total 100 100 100 100 Those in regular wage or salaried activities constitute less than eight percent of workers in rural areas. The corresponding number in urban areas is significantly higher at 43 percent. Note that these persons drawing a regular wage / salary are the potential workers who could, at best, hope to be covered under largely employment linked system of pension benefits during old age. This potential for combined rural (26.5 mn) and urban (56.9 mn) areas is estimated at 83.4 mn persons or 18 per cent of workers. In other words this is the maximum possible coverage (potential) in wage / salary linked schemes (both noncontributory and contributory) including private sector participants of NPS and voluntary members of EPF.

Summary: Contributory Schemes - Coverage, Funding, and Benefits The mandates are administered as employer-employee co-contributory schemes. Theoretically then, the maximum possible coverage (potential) in wage / salary linked schemes (both non-contributory and contributory) including private sector participants of NPS and voluntary members of EPF may not exceed 83.4 million. In 2012-3, there were 80.8 million accounts in the pension scheme administered by the EPFO. The annual pension benefit to a retiree emerging out of the EPFO system appears to fall short of the annualised poverty line. Latest valuation report of the pension scheme of EPFO for year 2008-9 suggests underfunding to the tune of INR 616 billion (almost 57 per cent of the corpus). Federal government contribution to all contributory schemes is unlikely to exceed 0.1 per cent of its total expenditure. Rate of contribution (for example in EPFO scheme) has been periodically ratchetedup. But no attempt is made to pare benefits. This arrangement connotes a continual increase in taxation of successive younger members joining the scheme.

Population Pyramid: Rebus Sic Stantibus (Latin for Things Thus Standing ) INDIA 1971 INDIA 2011 2.89 60+ 3.08 4.3660+ 4.22 Age Interval in Years 20.33 10.43 11.72 2.80 50-59 30-49 15-29 0-14 3.28 11.51 12.25 21.69 Age Interval in Years 12.49 13.25 14.71 3.54 50-59 30-49 15-29 0-14 3.74 12.99 14.28 16.05 25 20 15 10 5 0 5 10 15 20 25 Percent 25 20 15 10 5 0 5 10 15 20 25 Percent Female Male Female Male INDIA 1991 INDIA 2026 3.2160+ 3.46 6.31 60+ 6.11 Age Interval in Years 18.18 10.76 12.96 2.99 50-59 30-49 15-29 0-14 3.37 11.85 13.64 19.58 Age Interval in Years 5.21 50-59 14.17 30-49 11.52 15-29 10.99 0-14 5.03 12.80 12.38 15.54 25 20 15 10 5 0 5 10 15 20 25 Percent 25 20 15 10 5 0 5 10 15 20 25 Percent Female Male Female Male