young to old -- need for paradigm shift.pdf

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4thInternational Research Conferenceon Social Security

Antwerp, 5-7 May 2003

"Social security in a long life society"

Young to old - need for paradigm shift in social securityschemes in low population growth era

B.K. SAHUEmployees State Insurance Corporation

India

International Social Security Association Research Programme

Case postale 1, CH-1211 Geneva 22 Fax: +41 22 799 8509 e-mail: [email protected] Web: www.issa.int


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YOUNG TO OLD - NEED FOR PARADIGM SHIFT IN

SOCIAL SECURITY SCHEMES IN L.P.G. ERA

Summary

1. There has been a tremendous increase in the elderly population throughout the worlddue to the increase in life expectancy and the declining birth rate.

2. With the breakdown of the traditional family bond, social security for the aged isdiminishing.

3. It is a challenge for the Government and society to take care of the aged.4. Issues for their social security involve provision of healthcare, institutional support

and sustainable monthly income.

5. Government institutions like social security administrators/ organizations likeEmployees State Insurance Corporation and Provident Fund can play a vital role to

be supplemented by community efforts of NGOs and other private bodies.

6. Funding of social security by imposition of a cess / tax from whoever earns andthrough liberalized tax scheme for Pension contributions including theencouragement of long term savings.

7. To reduce the cost of health care, indigenous system of medicine needs to bepromoted.

8. Punitive action for those who do not care for elders in the family / society.9. Utilization of elders for social causes.10.All together to have a mission to help the elders.


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YOUNG TO OLD - NEED FOR PARADIGM SHIFT IN

SOCIAL SECURITY SCHEMES IN L.P.G. ERA

BACKGROUND:-

Income Security or Protection for the elderly, the disabled and the survivors, inthe event of the death of the breadwinner, has been a problem facing by mankind fromthe times immemorial. In the beginning, this obligation was met by the family. Evennow, when we are on the threshold of the Twenty-First century, in many cases,especially in the developing countries, it is met by the family, but because of extreme

poverty amongst a majority of the population, the continuous rise in inflation, thebreaking up of the families due to industrialization/urbanization and other factors, it hasbecome impossible for the family to meet this obligation, leading to destitution at thevulnerable old age or in the event of total disablement and in case of death of the breadwinner amongst survivors. On the other hand, the workers and others who serve the

society by running the wheels of industry, by producing food grains and otheragricultural commodities in the fields and by running the essential services required forliving and working - not only the wage earners but also the self-employed, have a right toexpect from the society, help in these eventualities. They must be assured that thesociety will manage its affairs in such a way that they can lead a life of dignity by havingsustained monthly income, when they are not able to work due to old-age, or disabilityand their survivors can also lead such a life after their death.

In the eighties, many of the countries - developed and underdeveloped cameunder the grip of economic recession due to various reasons. The developed industrialcountries found a way out of this recession by furthering the pace of technological

revolution, which helped in increasing production manifold. But in the developingcountries, the funds required for technological revolution were not available. Whenthese countries approached the International Monetary Institutions, i.e., the World Bankand the International Monetary Fund, they agreed to provide funds on the condition thatthey restructure their economies so that all restrictions on trade and globalization wereremoved and the multinational companies in the few advanced countries were allowed toinvest not only in the infrastructure or in heavy industries but also in consumerindustries. These international monetary agencies also propounded a new theory calledthe Trickle Down Theory to the effect that when enough wealth will be produced, someof it will trickle down to the poorest sections.

However, with globalization and massive restricting of old economies to new setups, the financial institutions along with some big industrial multinationals began

propounding the theory that the economies of not only the developing countries but alsoof the developed countries can no longer bear the burden of burgeoning social securityexpenditure, especially the expenditure on old-age pensions and health protection. Thereasons advanced were that longivity is increasing due to advances in the medicalscience. Because of continued research more and more medicines have been producedwhich cure many chronic diseases. Moreover, there was increasing consciousness, tolive in better environmental conditions. Due to increasing reliance on family planningmeasures, birth rate is declining. Life expectancy is increasing and the ageing process

had declined. People are living longer than they used to live. Because of demographic


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changes, the number of old people, beyond the age of 65 years is increasing. In thisregard, the Director General of the ILO in his report on Social Protection in the 80 thSession of International Labour Conference held in 1993 made the following statement:

"In the developed countries the ratio between number of people of active working

age (broadly speaking those between the age of 15 and 65 years) to the number of elderly(those over 65 years) has rapidly declined over recent decades, largely as a decline in

birth rate, but also due to increase in longivity. From an average of 7.5 individuals ofworking age persons over 65 years in 1968, the O.E.C.D. average has successfullydeclined to 5.4 in 1990 and is expected to fall to 3.8 by the year 2020. By the middle ofnext century there will be just two persons of working age per person over 65 years. Asimilar trend is occurring in developing countries where population are ageing becauseof decline of birth rate and increasing life expectancy."

ISSUES:-

3 aspects are to be considered when we are discussing to provide protection forthe elderly population irrespective of countries in the world. They are (1) Sustainablemonthly income (2) Institutional support and (3) Health Care.

Apart from the problem of sustained monthly income in the form of pensionduring old age, the elderly face another big problem, i.e., the health. With advancingage, chronic diseases seem to rush in. As much as 12% of our elderly population suffersfrom the debilitating Alzhermer's disease which requires expensive medication andinstitutional support which is not available due to fast disappearing joint family system.Apart from this, millions of elderly people have to face such chronic diseases as diabetes,chronic bronchitis, asthma, arthirites etc. According to the National Sample SurveyOrganization, as much as 45% of the 70 million plus elderly persons in this countrysuffer from some chronic disease or the other and over 5% are physically immobile.

In this regard, it is a tragedy that the Government, Medical Council of India andpremier medical institutions are not taking seriously the changing reality. According to amedical expert, even today geriatric medicine is not a specialized course in medicalcolleges and very few hospitals offer speciality services for the elderly.

Though various State Governments in the States and Union Territories haveintroduced old age, widows and disability pension schemes for the destitute persons who

have no other source of income or subsistence-such schemes have a very limitedcoverage and very meagre pensions. There is no national policy for welfare of the agedor disabled in the country-even after 50 years of Independence.

In such a situation what is the way out? Is it to enact laws to compel the young totake care of the aged as has been done by the Himachal State Government recently; andsuggested by some experts i.e., to revive the joint family system by force of law or is it toforce the working population to compulsory save and deposit in Private Pension Funds toget pension in old-age. Such short cuts are not going to solve the problem. In fact thesemay accentuate the problem.


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The only way out of this crisis is the well-tested method adopted throughout theworld during the 20th century, which is to cover all citizens under Social Insuranceand/or Social Assistance Schemes. Whereas persons working in the organized sector anda section of the self-employed having sufficient income should be covered under SocialInsurance Schemes, all other sections of people whether they are working in the

unorganised sector or are self employed small and marginal farmers, artisans, small shopkeepers etc., should be covered under 'Social Assistance Scheme'. To make such ascheme viable a small cess should be levied on all types of industrial and agricultural

production. Such a cess has already been levied in this country to finance WelfareSchemes for Beedi workers, Cine workers, employees in Iron ore, Manganese ore andChrome ore Mines, labour in limestone and Dolomite mines etc.

THE SCENARIO AS AVAILABLE IN INDIA:-

The Constitution of India provides a Socialist State with an over all object ofremoving inequalities in income, status and standards of life. Article 38 of the

Constitution requires that the State should strive to promote the welfare of the people bysecuring and protecting as effectively as it may, a social order in which justice, social,economic and political, shall inform all institutions of national life. The Constitutionalso guarantees certain fundamental rights to every citizen including the right to life.The Supreme Court of India has ruled that the right to life as enshrined in theConstitution include right to livelihood which in turn means adequate nutrition, shelter,health care and clean water supply as well as security against sickness, disability death,unemployment and old age.

2. To guarantee the right to Social Security to the elderly citizens particularly in thematter of health care is fraught with great challenges. In India the percentage ages ofelderly persons is already on the rise. It is estimated that by the year 2016 the elderlywill constitute 9% of the total population in India. There has been increasingconsciousness to live in a better environmental conditions coupled with improvedmedical care as available in the country which helps in decline in ageing process andincrease in the life expectancy. People are living longer than they used to live earlier.India has achieved tremendous success in family planning by pursuing educative,

popular methods like contraceptives and sterilizations, which have brought down thebirth rate considerably. It has been estimated that the present life expectancy in India hasgone upto 60-62 years.

3.

Keeping in view of the projected elderly population of 9% by 2016 which isroughly calculated at 9 crores, responsibility has fallen on the state to plan and providesocial security assistance to the elderly population. Sweeping social and economicchanges which have already engulfed the globe has not left India untouched which isalso rapidly growing as one of the biggest economic power next only to USA, Japan andChina. In India rapid and unbridled urbanisation has resulted in shortage ofaccommodation in cities and towns together with high rentals and atrophy of the jointfamily systems. The traditional respect care and concern for them have also come down.Simultaneously migration of younger people from rural areas to metropolitan and othertowns heightens the helplessness and vulnerability of the elderly people who are left

behind. Otherwise also the growing trend of nuclear family with husband, wife and a

child at the best, has little concern for elderly parents. The predicament of elderly


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population in rural areas, more so the landless and assetless couples without havingindependent and supportive means of livelihood has also been accentuated due to thesefactors. Increasing literacy and education of women leads to increase in the number ofworking women and such women have no time to take care of the elderly familymembers who are left behind at home to recline on their own condition.

4. The incidence of ageing people, being on rise, the state, as part of its mundaneduty to guarantee, a good, decent and respectful life, has to work out a successful action

plan. One of the most fundamental plans call for the elderly population is health care. Itis the age factor which is prone to disease, debility and decaying process in the

physiology and which needed the state care. Right now in the state sector no easy andaffordable care is available particularly for the elderly population left with lean means ofresources. To add to worries the cost of medical care is also sky diving.

5. The ESI Scheme in India can play a vital National role in providing medical careto the elderly persons. In fact the ESI Scheme has already started providing medi-care to

disabled and elderly IPs in a very limited way with a nominal annual contribution ofRs.120/- ($2.5). With this nominal contribution, the insured person (retired anddisabled) and his spouse get free and full medical care for a year. However, this Schemeis yet to take off in a big way.

6. Under the ESI Scheme a huge medical infrastructure has already been created inthe country which is as follows as on 31.3.2000.

1. No. of State/Union Territories where ESI Scheme is working 22

2. Total No. of Centres 655(with 19410 beds)

3. No. of ESI Hospitals 136

4. No. of Medical Annexes 43

5. Beds reserved in other Hospitals 3443

6. No. of ESI Dispensaries 1443

7. No. of ESI Medical Practitioners' Clinics 2988

The Scheme is making steady inroads in the new areas, new sectors of

employments through out the country. According to a policy decision taken recentlywhole territory of a district in each State is being adopted with proposal to extend ESIScheme to the remote villages having coverable factories/establishments. Thus the ESI

Scheme has the net-link of medical care through out the country, apart from its heavypresence in the mega cities of Chennai, Mumbai and New Delhi as well as in theemerging mega cities like Ahamedabad, Bangalore, Hyderabad and Kanpur, wherehighest percentage of elderly people having left their active lives due to superannuationor otherwise live and crave for medical care.

7. As already stated above, the ESI Scheme is already providing medical care tosuperannuated insured persons and disabled insured persons and their spouses on

payment of a nominal contribution of Rs.120/- per annum. This Scheme is getting morepopular day by day with more number of conscious elderly insured persons comingforward to avail such benefit. Right now the Scheme is already on hand to extend the


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"NATIONAL POLICY FOR OLDER PERSONS:-

The ageing of population is a global phenomenon. In 1950, there were about 200million persons aged 60 and over in the world, constituting 8.1% of the total global

population. It is projected that by the year 2050, there will be a nine-fold increase in the

population of the aged to 1.8 billion representing about 20% of the total population.

India is no exception to this trend. According to the 1991 census, the proportionof the elderly persons has risen from 5.3% in 1961 to 6.58% in 1991 and is expected to

be 9.08% in 2001 and 9.87% in 2021. More than four-fifths of the elderly persons live inrural areas, and the female elderly out number the male elderly.

According to the 42nd round of the NSSO, 34% of the rural elderly werefinancially independent as against 28.94% in urban areas, 12% of the male elderly werestaying alone, and this percentage was a little above 1% for females.

There are three ways in which social protection is provided to the elderly,namely, social assistance, social security and provident funds.

We will reiterate the need for a national policy for older persons. Moreover,assuming that at least 1% of the aged require institutional care, facilities would have to

be created for providing institutional care to about fifteen lakh persons. It is difficult tobelieve that an adequate number of voluntary organizations will come forward to set upso many old age homes. There is, therefore, no alternative to the Central and StateGovernments taking the initiative to set up their own homes in sufficient numbers.

One cannot be content with the setting up of homes. The quality of serviceprovided in these homes needs to be monitored. The existing arrangements in this regardare less than adequate. It is, therefore, necessary to establish a well-organized regulatorysystem to ensure that standards are maintained, and exploitation avoided.

With the growth in the population of the aged, the associated problem of caringfor the aged is becoming increasingly important. Lately, long term care of the elderly insome of the developed countries has been systematized in the form of social careinsurance as a part of social security. It has been reported that in 1991, in Germany,approximately one-third of the social security expenditure was devoted to care provision.The concept of care dependency is distinct from treatment for illness, and it covers help

with daily tasks that do not fall under any medical treatment plan, e.g., personal hygiene,feeding, mobility or housework.

The normal and preferred arrangement for taking care of the aged is to encouragethem to live with their families. This would also be consistent with our nationaltradition. Where there are either no families, or where the families cannot look afterthem, they would have to be provided with institutional care.

Appropriate schemes would need to be designed for the health care as well aslong term care of the elderly. It may be mentioned here that the health insuranceschemes of the GIC do not cover persons who are above the age of 70 who required

greater attention, for reasons that are obvious.


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Maintenance is a civil right that enables needy persons to receive economic

support from those who are liable to protect and maintain their spouse, children, parents,etc. By law, parents are bound to maintain minor children, major children their parents,the husband his wife, and vice versa. The quantum of maintenance varies depending on

the economic status of the parties. The various personal laws such as the Hindu marriageAct, 1955, the Hindu Adoption and Maintenance Act, 1955, the Indian Divorce Act,1859, the Parsi Marriage Act, 1954, the Shariat Laws etc., provide for maintenance, alsoknown as alimony or allowance. Civil courts take a long time to dispose off cases. Evenif a competent civil court passes a judgement and decree, execution takes months andeven years due to cumbersome legal procedures. Even before the maintenance isrealized the decree holder may die of starvation.

Realizing the above, the right to maintenance has been incorporated in ChapterIX of the Criminal Procedure Code (Cr.P.C.). It is an entitled 'order for maintenance ofWife, Children and Parents.' Under Section 125 of the Cr.P.C., 'if any person having

sufficient means neglects to maintain (a) his wife, unable to maintain herself, or (b) hislegitimate or illegitimate minor child, whether married or not, unable to maintain itself,or (c) his legitimate or illegitimate child (not being married) who has attained majority,where such child is, by reason of any physical or mental abnormality or injury unable tomaintain itself, or (d) his father or mother, unable to maintain himself or herself, amagistrate, of the first class, may upon proof of such neglect or refusal, order such

person to make a monthly allowance for the maintenance of his wife or such child, fatheror mother, at such monthly rate not exceeding five hundred rupees on the whole, as themagistrate thinks fit, and to pay the same to such person as the magistrate may from timeto time direct. A ceiling of Rs.500/- per month towards maintenance will not preventvagrancy though that is the object of the provision. Various women's and civil rightsorganizations and other activists have raised their voice against this ceiling. In WestBengal the amount was raised to Rs.1500/-.

In Tamil Nadu, after a long debate with various sections of society and women'sorganizations and the Tamil Nadu Women's Commission, it was decided to amend theCr.P.C. and remove the ceiling, and to vest in the magistrate, the power to grantmaintenance in his discretion, taking into account the capacity of the person to pay, andthe need of the person seeking maintenance. The Legislative Assembly unanimously

passed a bill to amend the Cr.P.C. accordingly, and it was sent to the CentralGovernment for obtaining Presidential assent. In the meantime, the Government

changed, and the Bill has been withdrawn on the ground that the Central Governmentitself is contemplating a similar amendment.

In sum, the Union Law Minister announced that the Government of India isplanning to enhance the interim maintenance limit for an estranged wife from theexisting Rs.500/- to Rs.5000/- on the recommendation of the Law Commission. We areglad to learn that this has now been done through an amendment to Section 125 of theCr.P.C.

We welcome this move and suggest that the ceiling on the amount to be paid formaintenance of dependants may be removed as was proposed by Tamil Nadu, and it may

be left to the courts to decide the amount depending on the facts of the case."


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In order to ensure that the elderly keep healthy, it is necessary that they remain

gainfully active. Their service can, therefore, be utilized in various activities of thecommunity such as manning child care centres, cultural clubs, vocational trainingcentres, etc., for which they may be paid appropriate remuneration.

CONCLUSION:-

This is one of the challenges facing this country in the Twenty First Century. Weare at the threshold of the new century and the Government and non-governmentorganisations together should draw out a national policy for the elderly to provide, firstlysustainable monthly income to the aged, disabled and survivors in case of death of the

bread winner under Social Insurance and/or Social Assistance Schemes, secondly toprovide adequate health care facilities without any cost and thirdly to provide a net workof well managed Old Age Homes. To implement this policy a separate Ministry ofSocial Security should be created at the Centre and an autonomous Social Security

Institution/Board/Authority accountable to the Parliament, manned by experts in thisfield be set up. Such institutions be set up at the State level with branches in all theDistricts to take care of entire gamut of social security for the entire society, young to oldand organized or unorganized.

Our goal should be to evolve such a national policy for the elderly scheme by theyear 2005.

Let all political parties, Trade Unions and Non-Government organizations and theGovernment combine to take up this challenge so that all senior citizens who have spenttheir lives working for the country in the fields, factories, services etc. can live a life ofdignity in their old-age.

BySri B.K. SAHU

(Presently he is working as Regional Director, Employees' State Insurance Corporation,Andhra Pradesh Region, India. The views expressed are his own.)

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