Demographic changes along with the changes in the social norms, decreasing number of joint families and diminishing population in the middle class segment makes it necessary for India to think about looking after its senior citizens. Unlike the Western countries, we do not have any structured social security system for our people. While we have certain legislation’s to take care of senior citizens, these are inadequate to meet the requirements of the day.
Indians have now accepted that the Senior Citizens need looking after in their silver years. Although the terminology of Senior Citizens has been framed by our Central Government to describe elderly people of the country, dignity of their living or the respect they deserve has been a matter of ongoing debate in various forums. This is more so in the case of the middle income group, whose numbers are increasing and our political masters are addressing the concerns of the Middle Class.
While there are senior citizen homes either run on charitable basis or through government agencies/NGOs, the middle class citizens do not wish to stay in any such facilities, because the lifestyle that they have led does not match with what they get in such old age homes. Besides there is social stigma attached to the very name “Old Age Home” and, children do not want to see their parents living in these old age homes as it affects their social standing.
It is anticipated that elders in the country would increase both in absolute numbers and relative strength, indicating a gradual swing to senior population. As per Census of India projections, the percentage of elders as a total percentage of population would jump from 7.4% in 2001 to 12.4% in 2026 and touch 19.7% in 2050. In 2011, seniors above the age of 60 were 76 million and it is expected that this number will grow to 173 million by 2025 and further increase to 240 million by 2050. These are not small numbers and without a structured social security system, the problem of managing senior citizens in the coming years will be very complex and cumbersome.
How do senior citizens occupy themselves post retirement? They simply relax, adopt a laissez faire approach to life, care for their grandchildren, tend their gardens, read books or magazines, watch television and generally speaking lead a very sedentary life. Yet, the senior citizens demand or want attention and do carry lot of expectations. The Middle Class seniors are financially self sufficient and are worry free, since they have fulfilled their familial obligations. What they expect is a lifestyle where care and comfort be the bywords for their day to day life without losing their independence and freedom.
The metamorphosis in our family system and culture, from a joint family system to a nuclear family orientation today, has undoubtedly withered away the once active support systems to take care of the seniors. With this change in dynamics of the family system, most of the senior citizens have been forced to fend for themselves and therefore look forward to the Central Government for a great deal for concessions every time the Union Budget is round the corner. This is primarily because the Union and State budgets impact their daily finances in every respect.
One big factor influencing this urge of the senior citizens is their inability to earn regular monthly income as compared to normal citizens because of their retirement, age and health reasons. As their income becomes static, their ability to manage their livelihood by manifesting their available finances becomes a major source of worry for them.
Besides we are witnessing declining interest rates and this affects senior citizens who rely on interest on Fixed Deposits. Add to this the longevity of life, the cost of care increases with advancing age. Thus senior citizens find it extremely difficult to maker both ends meet if they live long. It also has a major part to play in maintaining their lifestyle and the ability to pay for critical expenditure in the context of inflation hurting them year after year. Sadly, even those who get regular pension have not catered for the additional expenditure that they will have to incur due to inflationary pressures.
What therefore, could be the possible wish list for senior citizens in the Budget to be presented in February 2017?
1. As most of the senior citizens park their money in Savings Bank / Fixed Deposit Accounts fearing risks involved in other financial instruments, major part of their interest comes from these. Because of decreasing interest rates, the expectation from the Budget would be to hike the limit of taxable interest earned from savings / fixed deposit accounts.It is already a worrying factor that this form of interest is not even good enough to beat inflation, leave alone meeting one’s daily needs.
2. There is also an imperative need to treat senior citizens as one single composite category, rather than as two different categories namely se-nior and very senior citizens, as both the categories in general do not earn any active income. It is a fervent appeal from a large section of seniors to integrate both the categories and revise the income tax exemption limit from the existing Rs.2,50,000 per annum to Rs.5,00,000 or even more.
3. The Government must also spare a thought from a purely philosophical point of view that the senior citizens having paid taxes all through their earning years at the least expect the Government to be considerate in their sunset years so that they can lead a fairly decent life.
4. Reliability of Financial Instruments is also a big matter of concern because when one is old and frail, trust is the biggest factor on their mind. With the kind of complicated financial instruments in the market, it is really con-fusing for even ordinary investors to choose the right instruments. The travails of senior citizens is therefore more complicated. The expectation from the government in the budget would be to introduce some government sponsored investment avenues which can be helpful for senior citizens to park their money as they can offer safety.Of course, they should also offer reasonably good returns.
5. Another initiative could be to reduce the cost of living for senior citizens. One such example could be to abolish service tax levied on senior citizens for the services rendered to them including medical & health care, financial services, legal services, property management services, home maintenance and upkeep services, etc.
6. The middle class senior citizens are an educated lot and many have held high positions in their civil life including in big corporate. There is a huge knowledge bank available with the senior citizens. The Government should institutionalize schemes whereby the industry as well as educational institutions can gain from the vast knowledge that the seniors possess. These need not be a daily wage earning scheme but could be in terms of sharing their experiences with the student community and helping the industry on issues which needs specific solutions for a specific problem. This way, the seniors will also remain active and at the same time both the industry and educational institutions can gain from the huge knowledge base and experience that they possess. The Government should look at this seriously so that the middle class seniors can benefit. This could help reduce a lot of expenditure being incurred on shoring up the education and industrial sectors with short term strategies.
7. Medical and Allied Health Care: As one grows old, their biggest worry is the propensity to confront health issues. Rapid advancements in medical field have led to world class health care but for senior citizens it has become increasingly expensive. No active income, higher expenditure and non-availability of adequate insurance cover as well as high cost of medical insurance makes managing the health budget of seniors more difficult. The expectation from this Budget is to increase the exemption limits on medical treatment from the existing Rs.5,000 to Rs.1,00,000.
8. Retirement Communities:
Retirement Communities have come to stay in India as they provide care and services for the middle class seniors and is a boon to them because it gives them a lifestyle that they are used to where group cohesion and camaraderie become an integral part of their life.
There are companies who have devoted their business in developing such retirement communities and they invest large amount of money on building senior specific dwelling units, service amenities and infrastructure to cater to the daily needs of seniors. The seniors who settle into such communities pay registration charges, service taxes and other statutory levies as are applicable for any other common citizen.
Neither the senior citizens nor the companies who are engaged in running of such retirement communities get any tax benefit from the Government. Therefore, the Government should seriously consider giving certain concessions in the various taxes the companies as well as the senior citizens have to pay.
Another segment is the senior citizens who are parents of children with disabilities like Autism, Down’s syndrome, Spastics, etc. These parents spend lot of money to take care of such special children. Their biggest worry is “who will take care of their child after their demise?” The Government should give special concessions for these senior citizens who wish to live in retirement communities which has evolved a model to take care of such Adult Persons with Disabilities after the demise of their parents.
Every annual budget talks only about sun rise sectors of business and industry and promote the concept of fueling growth with special emphasis on poverty alleviation and taking care of the disadvantaged people in our society. No one can dispute the concern of the Government for these segments.
However, India is on the verge of seeing a big change in the percentage of people who are becoming senior citizens in the next decade. It is therefore imperative for the budget to focus on this sun set sector too and set the ball rolling for major transformations to support this set of people who have given all that they could for the sake of the country.