The Hush Post | 7:11 pm | Two-minute read |
Will the retirement age in the country be increased to 70? Well, if the Narendra Modi government follows Chief Economic Advisor (CEA) KV Subramanian and his team’s advice, this might be a possibility.
The Economic Survey for 2018-19, which was tabled in the Parliament on Thursday, hints at such a probability. The Survey cites increased life expectancy as a reason behind the proposal.
“Since an increase in the retirement age is perhaps inevitable, it may be worthwhile signalling this change well in advance – perhaps a decade before the anticipated shift – so that the workforce can be prepared for it,” said Finance Minister Nirmala Sitharaman while tabling the survey.
MOVE TO DEAL WITH PENSION BURDEN
The move will help the government deal with the ever increasing burden of pensions and at the same time plan in advance for pensions and other retirement provisions. Since the life expectancy is increasing, the retirement age for both men and women can be enhanced in line with the experience of other countries like Germany, France, the US and the UK.
Due to ageing population and increased pressure on pension funding, many countries have started increasing the pensionable retirement age.
POPULATION GROWTH TO BE AT 0.5 PER CENT DURING 2031-41
India’s population is expected to grow under 0.5 per cent during 2031-41 due to decline in fertility rate and increase in life expectancy.
“Such population growth rates would be close to the trend currently seen in countries such as Germany and France. In fact, with total fertility rates (TFR) projected to fall well below replacement level fertility by 2021, positive population growth in the next two decades will be due to population momentum and the continued rise in life expectancy,” the survey added.
The survey tells that lower levels of TFR and increased longevity will lead to a significantly ageing Indian population in just a decade from now.