OASIS

BACK TO INDEX

OLD AGE SOCIAL & INCOME SECURITY

As the work progressed, we realised the enormity of our task of making social security comprehensive as well as adequate. Hence we decided to break the Project into two phases. The first phase will cover existing mechanisms for social security - provident funds, pension schemes and Public Provident Funds. The second phase will cover other issues, including a new voluntary pension system, individual choice of diverse funds and fund managers, Regulatory Authority for the Pension Fund industry and need for a Redistributive Pillar.

We are overwhelmed by the remarkable reception that Project OASIS has received from all quarters. Everyone we met recognises that this is a very important problem and needs to be addressed soon. We have a lot to learn from the kind of reforms that other countries have adopted and from their experiences. We should not turn a blind eye to the experiences of the countries that have conspicuously brightened the lives of their old. Our myopic wisdom and failure to see what has happened or what can happen beyond a few years should not prevent us from breaking away from some of our past policies and take new initiatives.

We are immensely grateful to Industrial Development Bank of India (IDBI), ICICI Limited, Unit Trust of India (UTI), and Life Insurance Corporation of India (LIC) for providing financial support for this project. I am also thankful to all Committee members for their efforts and to all those who have actively interacted with the Committee. We trust we have provided a feasible and acceptable blueprint for action in this Phase-1 Report of Project OASIS.

Surendra A. Dave
Chairman
Project OASIS Expert Committee
01 February, 1999

Populations, worldwide, are ageing. In India , while the total population is expected to rise by 49% (from 846.2 million in 1991 to 1263.5 million in 2016), the number of aged (persons aged 60 and above) is expected to increase by 107%, from 54.7 million to 113.0 million, in the corresponding 25 year period. In other words, the share of the aged in the total population will rise to 8.9% in 2016 (from 6.4% in 1991). Population estimates further suggest that the number of the aged will rise even more rapidly to 179 million by 2026 - or to 13.3% of the total Indian population of 1331 million.

Today, males and females in India at age 60 are expected to live beyond 75 years of age. Thus, on an average, an Indian worker must have adequate resources to support himself for approximately 15 years (and his wife for an even longer duration) after his retirement.

Traditionally, governments and societies provide economic security during old age through pension provisions. Sound pension systems form a social safety net for reducing poverty during old age. However, a rise in the number of older persons often causes a corresponding increase in government expenditure on non-contributory pensions and health services - since health and pension spending rise together. Higher government spending on old age security has often been at the cost of expenditure on other important public goods and services and has increasingly been a serious drain on government finances.

<<Prev

Next>>