Heath and Pension Policy Access by the Poor is Needed



Demographic transition in India and the issues involved are no longer of just academic interest. The impact of transition is now being felt everywhere so much so that it has even cast its shadows on the poor households.

To consider the impact it has on the poor elderly let us take a look at a survey that has become a point of reference for discussion on the demographic change in India. The human development survey conducted by the NCAER says that 45 per cent of the rural males and 75 per cent of the rural elderly women depend completely on others for living. In short, the family is the major pension and health insurance for the poor elderly in India.

However, with the increasing urbanisation and the intense desire to escape the clutches of poverty the young are leaving their nest in droves in search of employment elsewhere leading to a shift in the family dynamics of the poor. The joint family structure and along with it the support structure for the poor is threatened as a result. To note in passing, the joint family structure in India survived the longest in the world and looked after the elderly in the family. Therefore there was hardly any thought to provide for themselves as they grew old. Secured in the knowledge that by looking after the family now, they will be looked after by the family in turn when they grow old, there was hardly any compulsion to look for alternative channels of support for a time in the future when they would be out of actively earning stage. Now it is predicted that by 2050, 21.6 per cent of the population will be above 60 years old. Add the rising level of life expectancy to it and we are left with an elderly population without any health or old age income support of consequence.

As it is, pension coverage in India has a lot of scope of improvement. With just about 7.4 per cent of the population covered under any pension plan we can well imagine the intensity of the problem and the shape it might take in the near future. To counter this trend by taking advantage of the government encouragement to address the issue on a war footing, microfinance industry has a huge role to play here. It is now a reasonably accepted fact that the microfinance initiative is providing an increasing traction to financial inclusion by building financial literacy and providing access to fund to the needy. However, time has come for the industry to expand its product range by including health insurance and pension products for the aspiring poor – to those who are taking advantage of the microfinance – in a manner that would meaningfully address the emerging threat of a huge number of uncared for elderly population. A start towards this direction could nest in popularising micro insurance products.

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