The architecture of choice

Puja Mehra
Humans are not unerring. Often enough, perfectly rational people tend to behave irrationally, as any salesman or advertiser would attest. Simply reducing the price from ₹1,000 to ₹999.99 increases sales. Economists used to believe that such human irrationality was compatible with economic theory. Psychologists showed in the 1960s that humans are irrational in a systemic way.

Consider this true story. A class found an exam in which the average score was 72 points out of 100 ‘too tough’. The same set of students were delighted on scoring an average of 70% in a subsequent one. Why? Because the numerical average of the class scores was 96 points. The professor had purposely raised the perfect score to 137 points. This exam was tougher; the average score had dropped. Rationally, the students should have been unhappy. Instead, they were elated.

That professor is behavioural economist Richard Thaler, the winner of the Nobel Prize in Economics this year. He went on to show that even small departures from rationality have outsized impacts, and that limitedly rational humans don’t fit neatly into classical economics. So, he helped develop a new branch of economics, behavioural economics, to study the interplay of human quirks and economic forces.

Prof. Thaler’s work is famously applied in constructing choices. How a choice is framed tends to influence choosers’ behaviour. Choice architects can thus ‘nudge’ choosers in a direction. For instance, by making a pension plan the default option, while giving the choice to opt out, people can be ‘nudged’ towards saving for their retirement. Scores of people have been successfully enrolled into pension schemes by default this way.

Pushing people in the directions that the choice architects prefer is not nudging, though. The nudge philosophy is that the chosen option makes choosers better off as judged by themselves. Say the problem at hand is unhealthy eating habits, which lead to obesity. An extreme solution would be strictly-enforced bans and diktats on food that can be consumed and that which is prohibited. A less extreme public policy would be a sin tax on fat or sugar. Nudge-type policies, on the other hand, would tend to include things like displaying the healthier food options relatively more prominently. Or mandating calorie labels on sweets boxes.

Changing mindsets

Development policies become measurably more effective when combined with insights into human behaviour. A common refrain in India is that constructing toilets will not guarantee cleanliness and hygiene; Swachh Bharat will succeed truly if behaviours change. For which mindsets must change. In experiments conducted in some States, application of behavioural economics successfully changed the sanitation mindset. The World Bank has documented some of the pilots. One such study found that open defecation dropped 11% from very high levels after a community-led total sanitation programme was combined in a few chosen villages with the standard approach of subsidies for toilet construction and information on the transmission of diseases.

Since going out in the open is partly a social norm, the researchers tried to facilitate the building of a new social norm. A technique was used in which volunteers escorted the villagers out to the field where they put some food next to some human waste. The experiment involved watching the flies go back and forth. The villages were nudged into collectively rejecting open defecation by making a declaration in public. The point being that to reap the benefits of sanitation, everybody has to do it together. Behaviours changed measurably.

Another study involved puzzle-solving sessions. It helped understanding the effects of caste on classroom performance. Boys from backward classes were found to be just as good at solving puzzles as boys from the upper castes when the caste identities were not revealed. In mixed-caste groups, revealing each of the boys’ caste created a significant “caste gap” in achievements. The boys from backward classes underperformed by 23%.

The behaviour-informed approach to policy-making recognises that there are two systems of thinking. Thinking automatically and thinking analytically and deliberatively. Just as any tool can be used controversially, and in a way not intended by its creators, nudging is sometimes used for misshaping mindsets, behaviour or manipulation. Examples would include using stigma to deflect blame on to individuals, such as on social media, for systemic problems. The motivator in such cases encourages herd behaviour by making people think quickly. In such situations, it helps to get people to slow down their decision-making, make them think analytically.

An experiment from the U.S. is instructive. People were asked for their views on controversial topics, such as sanctions on Iran, in distinct ways. In the first approach, people were asked why they believed what they did. It immediately made them more argumentative and the polarisation increased. Then, when the same people were asked to explain how they thought the sanctions work, it made them think, and the polarisation and extreme views slowed down.

(Puja Mehra is a Delhi-based journalist)

The Sveriges Riksbank Prize in Economic Sciences 2017

The Royal Swedish Academy of Sciences

Richard H. Thaler has incorporated psychologically realistic assumptions into analyses of economic decision-making. By exploring the consequences of limited rationality, social preferences, and lack of self-control, he has shown how these human traits systematically affect individual decisions as well as market outcomes.

Limited rationality: Thaler developed the theory of mental accounting, explaining how people simplify financial decision-making by creating separate accounts in their minds, focusing on the narrow impact of each individual decision rather than its overall effect. He also showed how aversion to losses can explain why people value the same item more highly when they own it than when they don't, a phenomenon called the endowment effect. Thaler was one of the founders of the field of behavioural finance, which studies how cognitive limitations influence financial markets.

Social preferences: Thaler's theoretical and experimental research on fairness has been influential. He showed how consumers' fairness concerns may stop firms from raising prices in periods of high demand, but not in times of rising costs. Thaler and his colleagues devised the dictator game, an experimental tool that has been used in numerous studies to measure attitudes to fairness in different groups of people around the world.

Lack of self-control: Thaler has also shed new light on the old observation that New Year's resolutions can be hard to keep. He showed how to analyse self-control problems using a planner-doer model, which is similar to the frameworks psychologists and neuroscientists now use to describe the internal tension between long-term planning and short-term doing. Succumbing to shortterm temptation is an important reason why our plans to save for old age, or make healthier lifestyle choices, often fail. In his applied work, Thaler demonstrated how nudging – a term he coined – may help people exercise better self-control when saving for a pension, as well in other contexts.

In total, Richard Thaler's contributions have built a bridge between the economic and psychological analyses of individual decision-making. His empirical findings and theoretical insights have been instrumental in creating the new and rapidly expanding field of behavioural economics, which has had a profound impact on many areas of economic research and policy.

Atal Pension Yojana: Pensions to the poor

D RAJASEKHAR, SANTOSH KESAVAN, R MANJULA
In the last two years, the Government has introduced several new programmes, some of which are variations of earlier schemes. One such is the Atal Pension Yojana (APY), which was earlier called Swavalamban Yojana NPS (NatioAnal Pension Scheme) Lite. The APY was introduced in 2015 for unorganised sector workers who do not have sufficient and reliable old age security. 

 
The scheme encourages unorganised workers to make regular small savings during their working years towards pension benefits later. This is an important policy shift away from social assistance schemes to contributory schemes. 

 
Design features
APY clearly spells out end benefits of the pension scheme. Monthly pension ranging from ₹1,000 to ₹5000 is guaranteed upon retirement if subscribers contribute the prescribed amount for at least 20 years. This is an improvement over NPS-Lite where the pension amount was uncertain. 

The Government provides co-contribution as incentive for five years to poor, unorganised workers not covered by formal social security schemes. APY is a public scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA). The key functions of record keeping, administration and customer service are performed by National Securities Depository Limited. A Permanent Retirement Account Number (PRAN) is assigned to all subscribers. 

 
The scheme is tied to the broader mission of financial inclusion under the Pradhan Mantri Jan Dhan Yojana by using banks as intermediaries for promoting, administering and extending pension benefits to low income workers. With greater emphasis on e-governance, the scheme seeks to use mobile SMS reminders/alerts, electronic KYC-based registration and online exit, withdrawal, claims settlement processes to overcome last mile challenges and simplify the experience. 

 
Official statistics show that by March 2016 the scheme had registered 371 banks (public and private sector , RRBs, cooperatives,etc), enrolled 24.60 lakh subscribers, and was managing ₹506 crore of assets. The scheme registered the highest month-on-month subscriber growth (13.55 per cent) and asset growth (26.18 per cent) among all pension schemes in March 2016. However, unorganised workers covered by it are barely 1 per cent.

 
Slow to catch on
Stringent default penalties are a major impediment. If a subscriber misses six consecutive contributions, the account is frozen, after 12 months it is deactivated and beyond 24 months the account is permanently closed. Considering that APY is meant for unorganised workers with irregular income streams, this feature reduces the scheme’s effectiveness. 

 
Limited government co-contribution: Although co-contribution has been extended to 2019-2020, this could be availed of only by those joining before March 31, 2016. Given that the coverage of the scheme is less than 1 per cent, many unorganised workers joining the scheme in future cannot access it. 

 
Poor agent incentives: Banks are asked to administer APY so that new bank accounts opened under PMJDY could be used for promoting the scheme as well as expanding financial inclusion among the economically excluded. 

 
However, this will come in the way of the rural poor accessing the scheme due to low financial inclusion and low penetration of bank branches in rural areas. Moreover, incentives to banks are considerably lower than those provided in previous schemes since incentives have to be mutually negotiated, and shared between banks and business correspondents. 

 
Lower flexibility in exit and withdrawal: The exit process is rigid as the scheme permits premature withdrawals only in the event of death of the beneficiary or her/his being afflicted by a terminal disease. Subsequently, the exit option was given to the beneficiary if she/he gave up the government’s contribution and interest earned on his/her contributions. Considering that poor unorganised workers are highly vulnerable to workplace injuries, accidents and disability, this reduces the reach of the scheme.

Suggestions for improvement
Remove account closure for defaults: In the event of sustained non-payment, there can be a system by which subscribers are no longer entitled to a fixed monthly pension on retirement as per APY but can continue making suitable contributions to the APY account at his/her discretion to get different returns. At retirement, 40 per cent of the accumulated corpus can be converted into an annuity and the rest can be offered as a lumpsum.

Encourage mobile money payments: APY hopes to leverage PMJDY’s success to expand its coverage among low income workers. However, according to the RBI, while PMJDY has increased account density among underserved communities, account usage is low with nearly 35 per cent of such bank accounts having zero balance. This calls for the deployment of low cost and flexible mobile money channels, which is a newly emerging technology, to improve last mile access to banks for the rural poor. 

 
Ease of premature exits and withdrawals: APY should provide for partial withdrawal of the corpus in an emergency after a reasonable lock-in period of 5 or 10 years. Public Provident Fund schemes have a 15-year lock-in period prior to full withdrawal and allow 50 per cent withdrawal at the end of the sixth year. APY should introduce similar flexibility.

Enhance behavioural interventions: Behavioural interventions or ‘nudges’ have of late attracted significant attention as low cost policy tools to elicit desired savings behaviour. Studies around the world show that nudges such as peer comparison, commitment devices, goal-setting calendars and personalisation are effective in overcoming self-control issues and prompting regular savings. Although APY has incorporated SMS reminders and auto-debit facility, scope for embedding behavioural interventions into the APY design still exists.

These improvements are urgently needed to improve the coverage of unorganised workers and enhance old age security among them. 

Rajasekhar is a professor and Manjula a research officer at the Centre for Decentralization and Development, Institute for Social and Economic Change, Bengaluru. Kesavan is a founding trustee of Crosslinks Foundation, Bengaluru

An unkind cut for senior citizens

Alok Ray

The Government recently announced a significant reduction in interest rates on the so-called ‘small savings’ instruments — including various postal savings schemes, Senior Citizen Savings Scheme (SCSS) and Public Provident Fund (PPF) — to bring them in line with comparable bank fixed deposit interest rates. With rates likely to go down further, senior citizens, who depend on interest income for survival, are naturally upset.

The Government has stuck to its fiscal consolidation targets which the RBI considers a precondition (along with falling CPI inflation) for further cuts in the ‘repo rate’ (the rate at which RBI lends short-term funds to banks). 

Combined with the RBI dictum to banks to use ‘marginal cost’ (instead of average cost) of funds to determine the ‘base rate’ for lending, this should reduce interest rates for all depositors and borrowers across the spectrum. It implies that senior citizens would suffer more in the coming days.

Basic logic

What is the basic argument for bringing down interest rates for small savings instruments in line with bank interest rates? One major reason why banks fail to pass on the rate cuts to customers is that the effective interest rates on postal savings instruments, Senior Citizen Saving Scheme (SCSS) and PPF (specially if the tax benefits from PPF savings are taken into account) are significantly higher than those offered by bank FDs. As a result, even if the RBI reduces the repo rate, banks cannot afford to reduce the interest rates on FDs which, in turn, restricts their ability to lower interest rates to borrowers. So, in the interest of more efficient transmission of monetary policy, the RBI has announced substantial cuts in interest rates on postal savings schemes, SCSS and PPF.

Most economists would agree with the arguments advanced up to his point. The trouble arises because, in India (as in most developing countries), the interest rate instrument is used to promote more than one policy objective. 

In the absence of a workable social safety net, the interest earnings from accumulated savings serve as the only available means to protect the real income of senior citizens other than those receiving inflation-indexed monthly pensions. The across-the-board reduction in interest rates, even when justified in the interest of more efficient monetary policy transmission, may go against the objective of income stabilisation for the retirees.

Some economists argue that real interest rates (equal to nominal interest rates minus inflation) would remain the same when, along with reduction in inflation, the nominal interest rates are also being cut equally. Hence, there would be no adverse impact on interest earners. This argument is invalid since consumer prices are rising even when consumer price inflation is falling, unless, of course, we are considering a negative inflation rate (which is not the case in India). 

So, the nominal income from interest earnings would be falling while the nominal cost of living as reflected in expenditure on food, house rents, electricity bills and medical costs are rising or at best remaining the same. Clearly, the standard of living of the people depending on interest earnings for survival would be squeezed.

The question is, how to cushion the impact on less affluent retirees living on interest income, with least damage to monetary policy transmission. Several options can be considered. One, the interest rate on the SCSS may be left unchanged. Since one can invest only up to a maximum of ₹15 lakh in this scheme and even a 10 per cent interest would fetch only ₹1.5 lakh interest income a year, the major beneficiaries would be senior citizens with income well below the tax- exemption limit of ₹3 lakh a year. 

Given that only bonafide senior citizens can avail themselves of SCSS and that, too, up to a maximum total investment of ₹15 lakh, the additional interest cost on banks would be limited.

Finding solutions

There is much less justification for not reducing the interest rate on PPF which offers triple tax benefits (‘EEE’ meaning tax exemption on investment amount, interest earnings and withdrawal). Only relatively affluent people (not limited to senior citizens) with surplus income to save can make use of this scheme to save taxes. 

Each year, a person can invest up to ₹1.5 lakh in PPF, saving taxes of more than ₹45,000 (if in the 30 per cent tax plus surcharge bracket). Further, given that the interest income from PPF is totally tax exempt, the effective return from this instrument is much higher than all other schemes, including SCSS. Since all (affluent) people, irrespective of age, can invest in PPF, the additional interest cost and tax revenue loss could be a lot more than in the case of SCSS.

Raising the extra interest rate for senior citizens from the current 0.5 per cent to, say, 1 per cent, while reducing the general FD rates, is another possibility. 

Since the FD interest income is taxable, the biggest benefits would again accrue to poorer senior citizens below the tax exemption limit and progressively less for people in higher tax brackets. As postal deposit rates are being brought in line with bank FD rates of comparable maturity, the same extra interest benefit should be offered to senior citizens by post offices also (which is not the case now). 

All these modifications should be supportable on both equity and progressivity principles of public finance.

Apart from the economic justification advanced above, in a democracy, the electoral power of senior citizens (whose number is increasing with rising longevity) cannot be ignored. The recent roll-back of the Budget proposal for (partial) taxation of withdrawal from EPF, due to public outcry, is a case in point.

The writer was a professor of economics at IIM-Calcutta

Demographic dividend or damp squib?

CHARAN SINGH

The global economy is passing through a demographic crisis, with its growing ageing population. India, has an obvious advantage here, and could provide the world with skills and manpower. 

India has the world’s youngest workforce with a median age way below that of China and the OECD countries. The rest of the world, especially western countries, are ageing rapidly because of low fertility rates and increased longevity. Consequently, according to the Union government , the global economy is expected to witness a skilled manpower shortage of around 56 million by 2020. Thus, the ‘demographic dividend’ in India needs to be exploited to meet the skilled manpower requirements in India and abroad. 

The demographic dividend not only implies increased labour supply but also a challenge in finding capacity in the economy to absorb and productively employ extra workers. To make a larger number of people employable would necessitate large investment in human capital. Investment in educational and vocational training needs to be strengthened if India has to successfully reap the benefits of the demographic dividend.

In 2011-12, according to the Centre, in nearly 18 per cent of households in rural and 6 per cent in urban areas, there was not a single member in the age-group 15 years and above who could read and write a simple message with understanding. Similarly, the recent report by the National Sample Survey Organisation states that during the survey period of July 2011 to June 2012, nearly 25 per cent of males and 29 per cent of females in the age range 5 to 29 years did not consider education necessary to eke out a living. 

Again, nearly 25 per cent males in the rural areas and 33 per cent in urban areas reported that they did not attend educational institutions because they needed to work to supplement the household income. In the case of nearly 30 per cent females, the reason was that they had to attend to domestic chores.

In the case of vocational training, the situation is worse. Amongst persons aged 15 to 59 years, only 2.2 per cent reported to have had formal vocational training; 8.6 per cent received non-formal vocational training. As expected, the situation in rural areas was worse than that in the urban areas. Amongst rural males, the most significant share of vocational training was driving and motor mechanic work while for females, it was textiles-related work.

High expectations

The demographic dividend is expected to result in nearly 20 million people joining the workforce annually in the next 10 years. With the rising level of income, the expectations of people, especially the young, are also rising. The next generation of farmers want to be part of the growth India story and therefore out of the agriculture sector. To absorb such a large labour force, it is necessary to plan for appropriate vocations and employment opportunities. Narendra Modi recently observed that India will now need large number of ITIs, and a new ministry of skill development and entrepreneurship would coordinate the skill development needs of the country. The Pradhan Mantri Kaushal Vikas Yojana has been announced to encourage skill development for youth by providing monetary rewards. While all these efforts are encouraging, the fact remains that skill development strategy has yet not been successfully implemented. 

India’s workforce of nearly 484 million in 2012 could increase to 850 million by 2025, accounting for nearly one-quarter of the global workforce. MSMEs, with their flexibility and low cost, easily adapt to new technology and can help in strengthening the manufacturing sector. In fact, MSMEs have the potential to absorb the increasing labour force while helping to realise the potential of the Make in India strategy. The need is to explore new areas for MSMEs.

(The writer is the RBI chair professor of economics, IIM-B)

For a universal old-age pension plan

Prabhat Patnaik

India's social security system is woefully inadequate, when compared even to those in third world economies with no higher per capita incomes. Some States in India have fairly comprehensive social security schemes — notably Kerala, also West Bengal and Tamil Nadu — but the scale of the benefits is modest. However, the Union government has been quite lackadaisical in providing social security despite its enormous fiscal powers. Even the Unorganised Sector Workers' Social Security Act, which came into force in 2009, is merely an enabling legislation; it does not seek to put on the statute books any specific comprehensive scheme of social security.

This stinginess is particularly evident in old-age pension schemes. Some State governments have responded to the need to provide old-age pensions, but are hamstrung by their meagre resources. The Union government's Indira Gandhi Old Age National Pension Scheme (IGOANPS) covers only the Below Poverty Line (BPL) population and persons above 65 years of age; the pension amount it provides is an abysmal Rs.200 per month. Even so, an estimated 1.65 crore people access this scheme, an indication of the desperate need for succour. 

Four negatives in schemes

Even if we add up all the existing pension schemes, they touch only the fringe of the problem. First, they are an assortment of specific schemes rather than an expression of a right to pension. Second, they do not provide universal coverage. Leaving aside the pension schemes of the organised sector, the others, as they are, target specific groups of unorganised sector workers; even when not tied to specific occupational categories, such as the IGOANPS, they cover only the BPL population, whose size is arbitrarily fixed by the Planning Commission at a ludicrously low level. Third, a large number of them insist on some contribution from the beneficiaries. And fourth, the amount of pension they provide, as we have already seen, is pathetically small.

This is a serious problem, and likely to become even more so in the years to come, because the increase in longevity and the fall in the birth rate will raise the percentage of the “old.” By 2050, nearly a fifth of the world's population will be above 60. In India and China, the proportion is likely to be around 24 per cent. All over the world, progressive forces are demanding the institutionalisation of a publicly-funded, universal, non-means-related, non-contributory pension scheme for the aged, to be accessed by them as a matter of right. This demand has also begun to be raised in India, as a dharna at Jantar Mantar (May 7-11) demonstrated.

So pervasive, however, is the impact of the bourgeois media in India that even many otherwise well meaning persons may not appreciate the rationale of this demand. Why, they may ask, should a pension scheme be publicly-funded when those who draw the pension were earlier employed by private employers? Why should it be universal instead of being means-related? And why should it be non-contributory? Why should people who did not pay towards a pension scheme nonetheless enjoy a right to draw a pension?

The starting point of the answer to such questions is the basic social philosophical position that underlies the argument both for the welfare state and for socialism, namely, material deprivation is the result not of individual failing on the part of the deprived but of the social arrangement within which they live. This position is not a matter of faith; it is analytically sustainable.

To overcome destitution, including that which afflicts the old, we have to change the social arrangement which produces it. The first step in this direction is the use of the State's fiscal powers. Since the essence of democracy is that everyone must have adequate means of sustenance, access to it must be a right which is guaranteed by the State, on whom falls the responsibility of adjusting the social arrangements for this purpose.

Contribution by beneficiaries towards a State-maintained pension scheme is just one way that the State can raise resources for such a scheme. But to make that a condition for pension payment, apart from being iniquitous, undermines the right to pension that must be a part of democracy. Therefore, the demand for a non-contributory scheme is derivable from the rights-based approach, as indeed is the demand for universality. Of course the “old” are not the only deprived section in our population; poverty, deprivation and hunger are rampant in our country, but that is an argument for extending the right to adequate means of livelihood to all, not for denying it to the “old.” 

Adequate means

But what, it may be asked, constitutes adequate means of livelihood? Here one can follow two different approaches. The first, used in much international discussion, is to define “adequate” in the sense of avoidance of poverty, which in India is defined officially as access to 2,100 calories per person per day in urban areas and 2,400 calories (later reduced to 2,200 calories) per person per day in rural areas. The daily per capita expenditure level at which this was achieved in 2009-10 was Rs.36 in rural (for 2,200 calories) and Rs.65 in urban areas, whose weighted average (if we are to avoid different amounts of pension payments), is Rs.46. At current prices this would be equivalent to around Rs.60; in which case the monthly pension amount on this criterion should come to Rs.1,800.

The other approach, the one adopted by the Pension Parishad, which organised the Jantar Mantar dharna, sees pensioners as “workers” and hence entitled to a proportion of the wage income as pension. Based on this, the Parishad has demanded half the monthly minimum wage rate, or (in view of the differing minimum wage rates across States) a flat amount of Rs.2,000 at the current price, whichever is higher. This approach has merit. But no matter what precise figure is adopted (and the two are pretty close to one another), the point to note is that both approaches conclude that the monthly pension payment should be far higher than the current measly sum of Rs.200.

The Pension Parishad puts the pensionable age at 55 for men, 50 for women and 45 for specially deprived communities, while international discussions fix it at a blanket 60 for third world countries. The Parishad estimates that about 10 crore people belong to these age groups. With some exclusions, e.g. those who pay income tax, or those belonging to the organised sector whose pensions already exceed the stipulated amount, or if the age is increased to say 60, that would still be around eight crore people to provide for. At the rate of Rs.2,000 per person per month, the total would come to Rs.192,000 crore which, in round figures, is two per cent of the GDP.

Questions will be immediately raised on how such resources can be found. But the required resources can be put in perspective as follows: the growth rate of the economy, as the Union government never tires of repeating, has been around eight per cent, or, in per capita terms just over six per cent. The resources required will be only one third of the increase in per capita income, i.e. a third of one year's increase in the per capita income collected from the “average” Indian will be adequate to finance a universal pension scheme. The average Indian of course does not see his or her income rising at six per cent per annum in real terms, but this should make it even easier to garner the required resources from the well-to-do who corner the increases in income. In subsequent years, since the “real” pension per head will remain unchanged and the total amount will increase only at a rate slightly higher than the rate of population growth (owing to the increase in longevity), the percentage of GDP required for the scheme will keep going down, i.e. lesser and lesser proportions of the additions to annual income will have to be taken from the “average” Indian to finance the pension scheme. This surely is affordable, especially when the Centre has given away Rs.500,000 crore per annum, i.e. more than double the amount needed for a pension scheme, in the form of corporate and other tax reliefs in recent budgets.

For raising these resources, however, fresh taxes will have to be levied. The National Commission for Enterprises in the Unorganised Sector (NCEUS) had suggested a set of cesses to finance a far more modest social security scheme, costing only 0.5 per cent of the GDP. In international discussions the emphasis has been on a combination of Tobin Tax (at one per cent) and profit tax (two per cent of profits) for financing such a global scheme (which is supposed to cost $250 billion, at $1 a day for all those above 65 years in advanced countries and above 60 years in third world countries). Similar tax proposals can be worked out for India as well. The crucial need is to put democratic pressure on the State for launching such a scheme.

(Prabhat Patnaik is  Fellow at the Centre for Economic Studies & Planning, JNU)

Importance of old-age pensions

Jean Dreze 

It was a new experience, last summer, to go from village to village with student volunteers and listen to elderly women and men. Our main purpose was to understand how pension schemes for widows and the elderly worked in different States (Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Tamil Nadu and Uttar Pradesh to be precise). Testimony after testimony has opened our eyes to the critical importance of old-age pensions as a pillar of social security in rural India.

The first thing that struck me was the immense number of elderly people, and their miserable plight. They escape our notice most of the time, but if we have an eye out for them, they spring up everywhere. They live quiet and unobtrusive lives, some passing time on a broken charpoy, others collecting twigs, limping from one place to another, or simply lying ill in the darkness of a shabby backroom. They rarely complain — at least not in public — but if you enquire about their well-being, the tales of sorrow are endless.

It is not just in poor households that widows and the elderly have a hard time. Even in relatively well-off families, money is always in short supply, and the comfort of the elderly often takes the back seat. We met plenty of women and men who lived a life of deprivation even as their adult sons built good houses or rode motorcycles.

Whenever public meetings were called to talk about social security pensions, elderly women and men came out of their houses in large numbers to join the discussion. Those who were not receiving a pension pleaded for help to apply. Pensioners, for their part, complained that the pension amount was far too low. Even so, they clung to their bank or post-office passbooks as they might precious possessions. In their harsh lives, the pension was a chance to enjoy small comforts — relieving their pain with some medicine, getting their sandals repaired, winning the affection of their grand-children with the odd sweet, or simply avoiding hunger. 

Small leakages, but no big scams
The main insight from the survey was the basic soundness of pension schemes as a tool of social security and economic redistribution. Most of the recipients are, by any standard, deprived people who need social support — and indeed have a right to it. Aside from contributing to their economic security, pensions give them some dignity and bargaining power. The administrative costs are very low. Last but not least, the survey (which included verifying pension records in 160 sample villages) did not find any evidence of major fraud in pension schemes. There are leakages here and there, for instance when post-office employees take a cut to disburse pensions, but nothing like the scams that plague many other forms of government expenditure. And the leakages, such as they are, can be dealt with quite easily.

Having said this, pension schemes for widows and the elderly have five major flaws as things stand: narrow coverage, bureaucratic procedures, low pension amounts, irregular payments, and high collection costs.

To start with, the coverage of pension schemes is too narrow. According to Central guidelines, social security pensions are meant for “below poverty line” (BPL) families; financial support from the Central government is restricted to this category. Some States have launched their own schemes, with their own funds, to expand the coverage of pensions beyond BPL families. But the bulk of pensioners are selected from the BPL category. The unreliable and exclusionary nature of this eligibility criterion is now well understood in other contexts.

In the context of pensions, it is all the more inappropriate, because widows and the elderly are often extremely deprived even in relatively well-off households. BPL targeting should be abolished in favour of a universal or near-universal approach, whereby any widow or elderly person who does not meet well-defined exclusion criteria (such as having a government job) is eligible for a social security pension.

Second, application procedures tend to be very cumbersome. Numerous supporting documents have to be produced, and it often takes years for applications to wind their way up and down different layers of administration — Gram Panchayat, Block, District, State and back. In Latehar district (Jharkhand), we learnt from the Sub-Divisional Magistrate that pension applications were being forwarded to the State government at a snail’s pace simply because he had to sign each application six times. With about 13,000 applications pending, that meant 78,000 signatures, for this purpose alone. He was blindly signing application forms even as he was talking to us, without, for all that, making much of a dent in the backlog.

Third, the amounts of social security pensions are ridiculously low. The Central contribution to old-age pensions has remained at an abysmal Rs. 200 per month since 2006 —an insult to the dignity of the elderly. Some States top this up with their own resources, but even the topped-up amounts are measly, except in a few States like Tamil Nadu where the standard pension amount is now Rs. 1,000 per month. Pension amounts should be increased without delay and indexed to the price level.

Fourth, pension payments are highly irregular in most States. Often, pensioners have to wait for their pension for months, without having any idea as to when the next payment will materialise. This defeats the purpose of old-age pensions, which is to bring some security in people’s lives. More than ten years have passed since the Supreme Court ordered State governments to ensure that social security pensions are promptly paid by the 7th of each month, but few States have acted on this.

Fifth, even when payments are relatively regular, collecting them is often costly and tedious for old people with little mobility, education and power. Going to the nearest bank and queuing up there for hours can be an absolute ordeal for them.

Post offices are closer, but the convenience comes at a price — corrupt post-office employees often expect an inducement. Alternative options such as postal orders, business correspondents and cash payments pose their own problems. The Central government’s odd insistence on fast-tracking the transition to “UID-enabled” payments of social security pensions (one of the least appropriate applications of this problematic technology) is likely to be very disruptive — “UID-disabled” may well turn out to be a more accurate term in this case. 

Signs of change
All these problems are easy to fix. The main reason why it is not happening is that the people concerned count for so little. But this is changing: widows and the elderly have started agitating for their rights, with a little help from associations such as Ekal Nari Shakti Sangathan and Pension Parishad. Under public pressure or for other reasons, many States have started improving and expanding their pension schemes — Odisha, Tamil Nadu, Rajasthan, among others. Even Bihar and Jharkhand, the incorrigible laggards in such matters, are developing a serious interest in pension schemes.

Odisha, no paragon of good governance in general, presents an interesting case of a State which has put in sustained effort to strengthen pension schemes. Eligibility conditions have been relaxed and the coverage of pensions has been extended well beyond the ambit of Central guidelines. The lists of pension recipients are updated regularly and posted on the internet. Pensioners have well-designed and well-maintained passbooks with details of pension payments. Last but not least, pensions are promptly paid in cash at the Gram Panchayat office on the 15th of each month — even on August 15. This arrangement, very convenient for pensioners, is strictly enforced and appears to work very well.

The Central government, for its part, seems unable to get its act together on this issue. The need to put social security pensions on a sounder footing is well accepted in principle, and useful recommendations for this purpose have been made by an expert committee. However, little has been done to implement these recommendations — not even raising the Central contribution to old-age pensions above the paltry Rs. 200 per month. The “savage cuts” (as Union Minister Jairam Ramesh called them) in social expenditure sought to be imposed by the Finance Ministry are not going to help matters. The axe of fiscal austerity weighs most heavily on the poor and powerless, including destitute women and men who are expected to get by with Rs. 200 per month even as prices go through the roof.

(Visiting Professor at the Dept. of Economics, Allahabad University)

Public health- The ageing imperative: India needs to act now

Jack Watters

An Indian born in 1950 could expect to live for a mere 37 years. Today, India's life expectancy at birth has risen to 65 years and is projected to be 74 years by 2050. Indians are living longer — that's the good news. The bad news is the number of older Indians who will be affected by long-term , chronic conditions will increase, leading to serious economic, social and healthcare policy consequences.

By 2030, non-communicable diseases (NCDs) will account for almost three-quarters of deaths in India and the years of life lost due to coronary heart disease will be greater than in China, Russia and the US combined. In a study conducted by the Harvard School of Public Health, the economic burden of NCDs in India will be close to $6.2 trillion during 2012-30 .
Rapid urbanisation in India, associated with unhealthy nutrition and physical inactivity, may also contribute to the increase of age-related , infectious diseases such as pneumonia and influenza, as well as non-infectious chronic diseases such as stroke, cardiovascular ailments, diabetes, mental illnesses, cancers and respiratory infections, adding to healthcare costs and impacting productivity and the need for support.

The disquieting feature of population ageing in a place such as India is that ageing is taking place at lower levels of socioeconomic status, and the gap in health-related outcomes between the rich and the poor is widening. This will result in greater demand for healthcare, but older Indians may not be generating as much income as before to support it, leading to greater pressure on the working-age population to support senior members of the family financially and through care. This phenomenon puts added pressure on India's healthcare systems .
So, how do we ensure the healthcare system can cope with the extra burden an older society poses? Much is being done through civil society and institutions but more is needed. India as a nation needs to find ways to approach healthy and active ageing by promoting a healthy life course. With Indians living longer lives and India being the second most-populous nation in the world, the future of the country depends on healthy, active and productive ageing of its people. First, there is a greater need to educate citizens about preventive measures such as optimal nutrition, regular exercise, screenings and vaccinations.
A public health imperative to focus on preventive care and managing lifestyle factors should be the need of the hour for the new government. This will address some of the psychosocial factors and the productivity of ageing societies.
For example, in the US, strategies to reduce salt intake to help address obesity and to control tobacco use cost as little as $1-2 per person and avert millions of deaths and billions of dollars of loss in economic output. Second, preventive care programmes must be supported by all stakeholders and integrated into national healthcare systems to be successful . The work by institutions such as the Public Health Foundation of India, among others, is key.

There needs to be an industry-wide coalition of governments, care providers and businesses to create methods to promote wellness and enable healthy living. India should encourage research to translate knowledge into innovative and effective products , strategies, interventions and services that help prevent disease and improve well-being while being cost-effective .
For example, this could include tackling communicable diseases through new prevention frameworks , including immunisation programmes for children and adults. If the needs of older people are properly recognised, this newly-burgeoning population need not be a demographic catastrophe, but can become a demographic dividend. Everyone should collaborate to ensure that barriers to the healthy ageing of society are eliminated.
The clock is ticking. Western and developed nations are preparing for the demographic transformation ; and India, as one of the world's fastest-growing economies, can't afford to fall behind. Ageing and prosperity can go hand in hand and a life-course approach to healthy ageing is the most reliable way to ensure that India takes its rightful place in the world.
The writer is vice-president for external medical affairs, Pfizer

A case for universal pension

Ayanendu Sanyal / Charan Singh

The Pension Fund Regulatory and Development Authority Bill, 2011, was finally passed by the Parliament, after a delay of nearly a decade. The Bill, an important landmark in the pension history of India, would provide pensioners with a choice of schemes as well as permit foreign direct investment in pension funds. In a welfare state, old age social security remains pivotal, and one of its major components is pension.

Post independence, pension schemes were consolidated and expanded to provide retirement benefits to the entire public sector working population. Further, several provident funds were also set up to extend coverage among the private sector workers and the general public.

Why universal pensions
Pension reforms in India in the past decade have seen three major initiatives — a paradigmatic shift in the civil servants’ pension scheme in 2004, the introduction of National Pension Scheme (NPS) for all citizens, and the initiation of NPS-Lite for the economically disadvantaged sections with smaller savings. But all these schemes are contributory, and given the prevailing economic situation and lack of financial awareness, the coverage is low, estimated at less than 120 million persons.

To increase pension penetration, the government could consider Universal Pension (UPS) — a benefit which is received by citizen once they reach the stipulated age.

In its simplest form, the character of this type of pension is flat benefits with no means (e.g. income or asset, participation in the labour force, retirement from paid employment) test. Universal pensions are the easiest to administer, and have very low administrative costs in comparison to the other schemes.

A number of countries such as the Netherlands and Norway provide a universal basic pension that is tax-financed. South Africa, Australia, Brazil, Lesotho and Chile have pension schemes which exclude only a few.

Mauritius, Namibia, Botswana, Bolivia, Nepal, Samoa, Brunei, Kosovo and Mexico City provide a basic universal pension to the elderly, simply based on citizenship, residence and age.

If India was to consider a similar proposal, what would be the fiscal implication? An attempt has been made to estimate the fiscal cost of implementing a universal pension scheme in India where all Indians of the qualifying age and above will receive pension.

The estimates are based on the following assumptions: GDP records a real growth rate of 4, 5, and 6 per cent, since the annual average growth rate from 1950-51 to 2012-13 is 4.9 per cent; b) qualifying age is taken to be 60 years; c) future population of India has been calculated from the data set maintained by the United Nations; and d) pension estimates are made for 2015, 2025 and 2050 e) pension amount per month is assumed to be ₹500, ₹1,000 and ₹1,500.

The implementation of the UPS would entail a nominal additional expenditure of 1 per cent of GDP in 2015 if the economy grows at 5 per cent per annum, assuming that the pension amount is ₹500 per month.

Funding issues
In contrast, the existing pension liability of civil servants was about 2.6 per cent of GDP in 2012-13, of which pension bill of the Central Government constituted about 0.9 per cent of GDP and that of the State governments about 1.7 per cent of GDP.

Funding remains a major problem in the case of universal pension as the pension expenditure is already high. Nevertheless, since the welfare aspects involve the entire population, an additional burden can easily be comprehended.

On the other hand, like Mauritius and New Zealand, a part of pension can be recovered from pensioners who continue to work or have investment income (rich pensioners) simply by making the non-contributory pension taxable.

India has had an elaborate pension system for more than a century but nearly 80 per cent of the working population is not entitled to any pension. The elderly are not only productive but also serve as an anchor for many dependent children. By design UPS provides social protection which remains unattainable through contributory pensions. An introduction of this scheme will therefore enhance the welfare of the working cohorts of India’s majority.

(Sanyal is Assistant Professor of Economics, St Joseph's College, Bangalore. Singh is RBI Chair Professor of Economics, IIM Bangalore.The views are personal)

പെന്‍ഷന്‍ ഫണ്ടുകള്‍ വിശ്വാസ്യത ഉറപ്പാക്കണം

ഡോ. ബി. അശോക്‌

സംസ്ഥാനത്തിന്റെ റവന്യൂ വരുമാനത്തിന്റെ 80 ശതമാനത്തിലധികം (ജീവനക്കാര്‍ 60 ശതമാനം എന്നു പറയുന്നു; ആ തര്‍ക്കം അവിടെ നില്‍ക്കട്ടെ) ജീവനക്കാരുടെ വേതനവും പെന്‍ഷനും അപഹരിക്കുന്നു; വികസന പ്രവര്‍ത്തനം വായ്പകളില്‍ നിന്നു മാത്രം നടക്കുന്നു; ഇത് സംസ്ഥാനത്തെ കടുത്ത ധനകാര്യകമ്മി (Fiscal deficit) -യില്‍ എത്തിക്കും; പണപ്പെരുപ്പവും വിലക്കയറ്റവും നിയന്ത്രിക്കാനാവാതെയാവും എന്നൊക്കെയുള്ള നിഗമനങ്ങളിലാണ് നിശ്ചയിക്കപ്പെട്ട പെന്‍ഷന്‍ഫണ്ടുകളില്‍ നിന്നും വേതനക്കാരനും വേതന ദാതാവും ചേര്‍ന്ന് ദീര്‍ഘകാലം കൊണ്ടു പങ്കാളിത്തത്തില്‍ നിക്ഷേപിക്കുന്ന (Contributory) അടിസ്ഥാനത്തില്‍ പെന്‍ഷന്‍ ഏര്‍പ്പാടാക്കാന്‍ കേന്ദ്രസര്‍ക്കാറും ആ നയത്തെ തുടര്‍ന്ന് സംസ്ഥാനസര്‍ക്കാറും തീരുമാനിച്ചിരിക്കുന്നത്. പുതിയ ഐ.എ.എസ്സുകാരുള്‍പ്പടെയുള്ള കേന്ദ്രസര്‍വീസുകാര്‍ക്ക് 2003-ല്‍ തന്നെ പെന്‍ഷന്‍ കോണ്‍ട്രിബ്യൂട്ടറി ആക്കിയെങ്കിലും ഇപ്പോഴും കോണ്‍ട്രിബ്യൂഷന്റെ നിക്ഷേപ മാനദണ്ഡങ്ങള്‍ വ്യക്തമാക്കിയിട്ടില്ല. 2023-ല്‍ എങ്കിലും ആരംഭിക്കേണ്ട ഇവരുടെ പെന്‍ഷന്‍ ഇന്നും അനിശ്ചിതത്വത്തിലാണ്. 2003 മുതല്‍ 2013 വരെയുള്ള തുക ഇനിയെങ്ങനെ ശേഖരിക്കുമെന്നുമറിയില്ല. വികസനാവശ്യത്തിന് കൂടുതല്‍ റവന്യൂ വരുമാനം ലഭ്യമാക്കുക, അസംഘടിതമേഖല സ്വകാര്യമേഖല എന്നിവയുടെ പെന്‍ഷന്‍ ബാധ്യതയും ചേര്‍ത്ത് സുദൃഢമായ ഒരു വാര്‍ധക്യകാല സാമ്പത്തിക സുരക്ഷാപദ്ധതി എന്ന നിലയില്‍ ഈ പെന്‍ഷന്‍ഫണ്ട് ആശയത്തിന് ന്യായീകരണമുണ്ട്. പരിശോധിക്കേണ്ട ഒരു മാര്‍ഗമാണ് അത്. 

വളരെ ചുരുക്കിപ്പറഞ്ഞാല്‍ പുതിയ നിയമനങ്ങളുടെ ഭാവിപെന്‍ഷന്‍ വിഹിതത്തിന്റെ പത്തുശതമാനം മാത്രം സര്‍ക്കാറിന് ചെലവാകുന്നതാണ് സര്‍ക്കാറിനുള്ള നേട്ടം. ബജറ്റില്‍ എന്തെങ്കിലും വ്യത്യാസം അനുഭവപ്പെടാന്‍ ആദ്യ ഗുണഭോക്താക്കള്‍ പെന്‍ഷന്‍ വാങ്ങിത്തുടങ്ങണം. അഥവാ 25 വര്‍ഷമെങ്കിലും കഴിഞ്ഞു മാത്രം ഫലമറിയാവുന്ന ഒരു ധനകാര്യ നയമാറ്റമാണ് പെന്‍ഷന്‍ ഫണ്ടുകളുടെ രൂപവത്കരണം. 

ഈ പെന്‍ഷന്‍ഫണ്ടുകളാകട്ടെ പുതിയ കാര്യമേയല്ല. യൂറോപ്പിലും തെക്കേ അമേരിക്കയിലും ഇവരുടെ പ്രകടനം സമ്മിശ്ര ഫലങ്ങളാണുളവാക്കിയിട്ടുള്ളത്. പെന്‍ഷന്‍ ഫണ്ടുകള്‍ തുടര്‍ച്ചയായി 10ശതമാനം വളര്‍ച്ച കൈവരിക്കുന്നത് അത്യപൂര്‍വമാണ്. ഇംഗ്ലണ്ടില്‍ പെന്‍ഷന്‍ ഫണ്ടുകളുടെ മോശം പ്രകടനം കാരണം പെന്‍ഷന്‍ ഫണ്ട് സംരക്ഷണ ആക്ട് തന്നെ വേണ്ടി വന്നിരിക്കുകയാണ്. യു.എസ്സില്‍ ധാരാളം പെന്‍ഷന്‍ ഫണ്ടുകള്‍ തകരുകയും പാപ്പര്‍ നിയമത്തിന്‍ കീഴില്‍ സംരക്ഷണമാവശ്യപ്പെടുകയുമാണ്. ഇവിടെ പ്രസക്തമായ ചോദ്യം എത്ര കണ്ട് സ്വകാര്യ- സര്‍ക്കാര്‍-സംയുക്ത മേഖലകളിലെ ഫണ്ട് മാനേജുമെന്റ് സുരക്ഷിതമായിരിക്കും എന്നതാണ്. ശരാശരി 70 വയസ്സ് പ്രായമുള്ള ഭാവി പെന്‍ഷണര്‍ കോടതികളില്‍ കയറി ഫണ്ടുകളെ നിയമത്തിനു മുന്നില്‍ കൊണ്ടുവരാനുള്ള ആരോഗ്യവും കരുത്തും കുറഞ്ഞവരായിരിക്കും; മുതിര്‍ന്ന പൗരന്മാരെന്ന നിലയില്‍ അവര്‍ക്ക് പരിമിതികളുണ്ടാവും എന്നും നമ്മളോര്‍ക്കേണ്ടതുണ്ട്. വയോജന സംരക്ഷണത്തെയടക്കം ബാധിക്കുന്ന ഒരു വലിയ നയംമാറ്റമാണ് ഈ നവീകരണത്തിലുള്ളത്. കേവലം ജീവനക്കാരുടെ പ്രശ്‌നമല്ലത്. 2050 ല്‍ കേരളത്തിലെ കുറഞ്ഞത് അഞ്ചുലക്ഷം കുടുംബങ്ങളുടെ സുരക്ഷയുമായി ബന്ധപ്പെട്ട, 40 ലക്ഷം പേരെ ബാധിക്കുന്ന തീരുമാനമാണിത്. 

സര്‍ക്കാര്‍ വരുമാനത്തില്‍ നിന്നും നീക്കി വെക്കപ്പെടുന്ന പെന്‍ഷനാണ് നിലവിലുള്ളത്. ഇത് നല്‍കാനുള്ള ബാധ്യതയിലേക്ക് സര്‍ക്കാര്‍ ഭാവി പെന്‍ഷണര്‍മാരില്‍ നിന്ന്‌പോലും കടപ്പത്രം സ്വീകരിക്കുന്നില്ല. വാസ്തവത്തില്‍ സ്വകാര്യ ഫണ്ട് മാനേജര്‍മാരില്ലാതെ ശരാശരി സര്‍ക്കാര്‍ കടത്തിനേക്കാള്‍ കുറഞ്ഞ പലിശനിരക്കില്‍ പെന്‍ഷന്‍ കോണ്‍ട്രിബ്യൂഷന്‍ ജീവനക്കാരില്‍ നിന്നും സ്വീകരിക്കാം. ഇവിടെ പരിഗണിക്കുന്നത് സ്വകാര്യ മാനേജര്‍മാര്‍ കോണ്‍ട്രിബ്യൂഷനും ആനുപാതിക സര്‍ക്കാര്‍ ബജറ്റ് വിഹിതവും ചേര്‍ത്ത് നടത്തുന്ന ദീര്‍ഘകാലനിക്ഷേപവും (ശരാശരി 20 വര്‍ഷം) അതിന്റെ ധനകാര്യ ഫലസിദ്ധിയുമാണ്. 

ഇതില്‍ സുരക്ഷിതത്വത്തിന് എത്ര മുന്‍തൂക്കം നല്‍കണം എന്നു വാദിച്ചാലും ഫണ്ടുകളുടെ ശരാശരി നേട്ടത്തിന് നിക്ഷേപകരുടെ നല്ലൊരു പങ്ക് പണം ഓഹരികളിലെത്താതെ തരമില്ല. കാലാകാലങ്ങളിലെ ശരാശരി നിക്ഷേപത്തിന്റെ പ്രകടനമാണ് ഫണ്ടു മാനേജര്‍മാരുടെ മത്സരമികവ്. ഫണ്ടിന്റെ ഉടമസ്ഥത സര്‍ക്കാര്‍ കമ്പനികള്‍ക്കാണെങ്കിലും പൊതുമേഖലാബാങ്കുകള്‍ക്കാണെങ്കിലും ചുരുങ്ങിയ 'മാര്‍ക്കറ്റ് എക്‌സ്‌പോഷര്‍' ഇല്ലാതെ ഫണ്ട് നടക്കില്ല. കൂടുതല്‍ ശരാശരി വരുമാനം ഉറപ്പാക്കുന്ന ഫണ്ടുകള്‍ ശ്രദ്ധിച്ചാല്‍ ആദ്യ 5-6 വര്‍ഷത്തെ കാലയളവില്‍ മികച്ച വരുമാനം തരുന്ന ഓഹരികളിലും ഇടക്കാല ബോണ്ടുകളിലുമാവുംനിക്ഷേപം. സര്‍ക്കാര്‍ ബോണ്ടുകളുടെ ശരാശരി നിക്ഷേപം മാത്രം നിക്ഷേപിക്കാനാവുന്ന ഫണ്ടുകളില്‍ സ്വകാര്യ മേഖലയ്ക്ക് നടത്തിപ്പു ചെലവ(്Commission) മാത്രമേ കിട്ടൂ. ഇതിന് എത്രകണ്ട് ഫണ്ട് മാനേജര്‍മാര്‍ക്ക് ഉത്സാഹമുണ്ടാവും എന്നത് വ്യക്തമല്ല. 

പെന്‍ഷന്‍ഫണ്ടുകളുടെ പ്രയാസവും ഇതാണ്. പെന്‍ഷന്‍ ഫണ്ടുകളില്‍ സ്വീകാര്യത കൂടുതല്‍ ആദ്യ ഘട്ടത്തില്‍ മികച്ച ഇടക്കാല വരുമാനം തരുന്നവയ്ക്കാവും. എന്നാല്‍ ആദ്യ വര്‍ഷങ്ങളിലെ ഈ ചെപ്പടിവിദ്യ 20-25 വര്‍ഷത്തെ ദീര്‍ഘകാല പ്രകടനത്തിന് ഒരുറപ്പും നല്‍കുന്നില്ല. പെന്‍ഷന്‍ ഫണ്ടുകള്‍ അവരുടെ തന്നെ വിജയത്തിന്റെ ദുരന്തങ്ങളാവുകയാണ്. ആദ്യ വിജയം ധാരാളം നിക്ഷേപകരെ ആകര്‍ഷിക്കയും ബാധ്യത ശക്തമാവുകയും ഫണ്ടുകള്‍ തകരുകയും ചെയ്യുന്നത് സാധാരണമാണ്. പെന്‍ഷണര്‍ക്കുവേണ്ടത് ഹ്രസ്വകാല മികവുള്ള സ്‌കീമുകളല്ല; ദീര്‍ഘകാല സ്ഥിര വരുമാന- മെഡിക്കല്‍ ഇന്‍ഷുറന്‍സ് സ്‌കീമാണ്. 

ഇവിടെയാണ് മാര്‍ക്കറ്റിന്റെ അദൃശ്യമായ കൈ പെന്‍ഷണര്‍മാരെയും പെന്‍ഷന്‍ഫണ്ടുകളെയും അമ്മാനമാടുക. പ്രധാനമായും ഫണ്ടുകള്‍ നേരിട്ടിരിക്കുന്ന പ്രശ്‌നം ആകെ വരുമാനം വര്‍ധിപ്പിക്കാന്‍ നടത്തിയ ആസ്തി വിന്യാസം (Asset Allocation) ഗുണകരമല്ലാതെ മാറുക എന്നതാണ്. ഒരു വന്‍കിട കമ്പനിയുടെ പാപ്പര്‍ സ്യൂട്ടോ (ഇന്ത്യയിലെ 'സത്യം', യു എസ്സിലെ ജി. എം എന്നിവ പോലെ) വിദേശ കറന്‍സിയുടെ അനിശ്ചിതമായ കുതിച്ചുയരലോ വ്യവസായ മാന്ദ്യമോ ഒക്കെ മതി ഈ ബാലന്‍സ് തെറ്റാന്‍. ആസ്തിയില്‍ വരുന്ന ഈ ചാക്രിക ചാഞ്ചാട്ടം ഫണ്ടുകളെ ഒറ്റയടിക്ക് മൈനസ് ബാലന്‍സിലാക്കിയിട്ടുണ്ട്. OECD രാജ്യങ്ങളില്‍ തന്നെ നാളിതുവരെയുള്ള പെന്‍ഷന്‍ഫണ്ടുകളുടെ സഞ്ചിത നഷ്ടം 5.4 ട്രില്ല്യണ്‍ ഡോളറാണ്. സാമ്പത്തിക മികവുള്ള ഈ രാജ്യങ്ങള്‍ക്ക് പോലും നിയമനിര്‍മാണം മൂലം മാത്രം താങ്ങി നിറുത്താന്‍ കഴിയുന്ന വന്‍ ബാധ്യതകളാണിവ. തെക്കേയമേരിക്കന്‍ രാജ്യങ്ങളിലെ പെന്‍ഷന്‍ഫണ്ടുകള്‍ ശരാശരി 20 ശതമാനം മൂല്യം ഇടിഞ്ഞ സ്ഥിതിയിലാണ്. കറന്‍സി ഇടിയുകയും കച്ചവടക്കമ്മി (Trade Deficit) വര്‍ധിക്കുകയും ചെയ്തതിനെ തുടര്‍ന്നാണിത് (Antellion & Stewart)ഇവിടെയൊക്കെ സംഭവിച്ചിരിക്കുന്നത്. ഫണ്ട് മാനേജര്‍മാര്‍ പൊതുവില്‍ ഹ്രസ്വകാല നേട്ടം പെരുപ്പിച്ചുകാട്ടി ഫണ്ടുകളാകര്‍ഷിക്കുകയും ദീര്‍ഘകാല സുസ്ഥിരത പണയപ്പെടുത്തുകയും ചെയ്തു എന്നതു കൊണ്ടാണിത്.

പെന്‍ഷന്‍ ഫണ്ടുകള്‍ നിക്ഷേപമാരംഭിച്ചു കഴിയുമ്പോള്‍ തുടക്കത്തിലെ വ്യവസ്ഥകള്‍ എന്തായിരുന്നാലും മൂന്നു തരം പരിഷ്‌കാരങ്ങള്‍ സര്‍ക്കാറില്‍ നിന്നും സമ്മര്‍ദം ചെലുത്തി വാങ്ങുന്നതായി കണ്ടുവരുന്നു. ഒന്നാമതായി കോണ്‍ട്രിബ്യൂഷന്‍ നിരക്കുകള്‍ ക്രമേണ വര്‍ധിപ്പിക്കുക, രണ്ട് അംഗത്തിന്റെ കോണ്‍ട്രിബ്യൂഷന്‍ കാലാവധി നീട്ടുക (അഥവാ പെന്‍ഷന്‍ പ്രായം വര്‍ധിപ്പിക്കുക), മൂന്ന് ഓഹരി തുടങ്ങിയ അധിക വരുമാന സാധ്യതയുള്ള നിക്ഷേപകങ്ങളുടെ തോത് നിക്ഷേപത്തില്‍ വര്‍ധിപ്പിക്കുക. ഫണ്ടുകളുടെ ഇന്‍ഷുറന്‍സ് ബാധ്യതകള്‍ നിക്ഷേപകര്‍ക്ക് കൈമാറാനുള്ള നീക്കങ്ങളും കണ്ടുവരുന്നു. മറ്റൊരു രീതിയില്‍ പറഞ്ഞാല്‍ നിലവില്‍ വന്ന ശക്തമായ പെന്‍ഷന്‍ ഫണ്ടുകളുടെ ലോബിയിങ് ഈ രാജ്യങ്ങളിലെ സര്‍ക്കാര്‍ നയങ്ങളില്‍ പ്രതിഫലിക്കുന്നു. മാറ്റങ്ങള്‍ സര്‍ക്കാറിന് എപ്പോഴും ഈ രാജ്യങ്ങളില്‍ നടത്താം. ഇവയുടെ സഞ്ചിത ഫലമായിട്ട് ധനകാര്യ നേട്ടം കൂടിയിട്ടും യൂറോപ്പിലും തെക്കേ അമേരിക്കയിലും പെന്‍ഷന്‍ ഫണ്ടുകള്‍ ഉദ്ദേശിച്ച മെച്ചം നിക്ഷേപകര്‍ക്ക് നല്‍കിയെന്നു ഗവേഷകര്‍ കാണുന്നില്ല.

അന്താരാഷ്ട്രമായിത്തന്നെ വിവിധ പെന്‍ഷന്‍ ഫണ്ടുകളുടെ റേറ്റിങ്, അവയുടെ ദീര്‍ഘകാല വിലയിരുത്തല്‍ (Life cycle evaluation) എന്നിവ വികസിത രാജ്യങ്ങളില്‍ പോലും ലഭ്യമല്ല. പലപ്പോഴും ഇതര ഹ്രസ്വകാല ഫണ്ടുകളുമായും ഇന്‍ഫ്രാസ്ട്രക്ചര്‍ ബോണ്ടുകളുമായൊക്കെയാണ് താരതമ്യം നടക്കുന്നത്. ഇതാകട്ടെ ഒട്ടും ശാസ്ത്രീയവുമല്ല. 

ഇനി പ്രധാനപ്പെട്ട മറ്റൊരു ഗവേഷണഫലം പെന്‍ഷന്‍ ഫണ്ടുകള്‍ തമ്മിലുള്ള മത്സരം കൊണ്ട് ഫണ്ടുകളുടെ പ്രകടനം മെച്ചപ്പെടുന്നില്ല എന്നുള്ളതാണ്. ഇതിന് യൂറോപ്പിലടക്കമുള്ള കാരണം ആസ്തി വിന്യാസത്തില്‍ കേന്ദ്ര ബാങ്കടക്കം നടത്തുന്ന തുടര്‍ ഇടപെടലുകളാണ്. കര്‍ശന നിബന്ധനകള്‍ മത്സരം തടയുന്നു. എന്നാല്‍ ഫലത്തില്‍ പത്തു വര്‍ഷം പ്രവര്‍ത്തിച്ചശേഷം 80 ശതമാനം ചിലിയന്‍ പെന്‍ഷന്‍ ഫണ്ടും ഓഹരികളിലായി. എസ്‌തോണിയയില്‍ 50ശതമാനം പെന്‍ഷന്‍ ഫണ്ടും ഓഹരികളില്‍ നിക്ഷേപിച്ചു. മെക്‌സിക്കോവില്‍ 30ശതമാനം പെന്‍ഷന്‍ഫണ്ടുകളും ക്രമേണ ഓഹരി കമ്പോളത്തിലെത്തി. ഈ രാജ്യങ്ങളൊന്നുംഓഹരി നിക്ഷേപം ഇത്ര കണ്ട് പ്രതീക്ഷിച്ചോ നിജപ്പെടുത്തിയോ ഇറങ്ങിത്തിരിച്ചവയല്ല. ആദ്യ ഘട്ടത്തിലെ മികച്ച പ്രകടനം കൊണ്ട് നിക്ഷേപകരെ ഫണ്ടു മാനേജര്‍മാര്‍ ഓഹരികളിലേക്ക് ക്രമേണ കൊണ്ടുവരികയാണുണ്ടായത്. ഫണ്ടുമാനേജര്‍മാരുടെ വരുമാനം ഇതിനെ ആശ്രയിച്ചാണിരിക്കുന്നതെന്നും നമ്മള്‍ മനസ്സിലാക്കണം. 

ഉദാഹരണത്തിന് ചിലിയിലെ നിക്ഷേപങ്ങള്‍ 70ശതമാനം പെട്രോളിയം കമ്പനികളാണ് പിടിച്ചെടുത്തിട്ടുള്ളത്. 2008 ന്റെ മധ്യംവരെ നിക്ഷേപകര്‍ക്ക് ഇതിന്റെ ഗുണവും കിട്ടി. എന്നാല്‍ 2008 പകുതിയോടെ പെട്രോളിയം വരുമാനം ഇടിയുമാറ് കറന്‍സിയുടെ വിലയിടിക്കേണ്ടിവന്നു. ഇത് യു എസ്സിലെ സബ് പ്രൈം പ്രതിസന്ധിയുടെ തുടര്‍ച്ചയായിരുന്നു. കറന്‍സി 30ശതമാനവും പെന്‍ഷന്‍ ഫണ്ട് 40ശതമാനവും ഇടിഞ്ഞു. അതായത് 10, 000 രൂപ പെന്‍ഷന്‍ 6, 000 രൂപയായി ഒറ്റ രാത്രി കൊണ്ട് മാറി എന്നര്‍ഥം. പെന്‍ഷണറുടെ അത്യാഗ്രഹം പെട്രോളിയം കമ്പനികളും പെന്‍ഷന്‍ മാനേജര്‍മാരും പ്രയോജനപ്പെടുത്തിയപ്പോള്‍ നഷ്ടം നിക്ഷേപകര്‍ക്കു മാത്രം.

ഫണ്ടുകളുടെ അന്താരാഷ്ട്ര വിനിമയമുള്ള ഭാഗം അഥവാ ഡോളര്‍ നിക്ഷേപം ട്രേഡ് ഡെഫിസിറ്റിനെയും കറന്‍സി വ്യതിയാനത്തെയും ആശ്രയിച്ചിരിക്കും. അതായത് ഉത്പാദനമാന്ദ്യമോ വ്യാവസായിക തളര്‍ച്ചയോ കാര്‍ഷിക മരവിപ്പോ ഒക്കെ അന്താരാഷ്ട്രവിനിമയത്തിലൂടെ ഫണ്ടിന്റെ വളര്‍ച്ചാസാധ്യതകളെ ബാധിക്കും. മറ്റൊരു അബദ്ധ ധാരണ ശരാശരി പെന്‍ഷന്‍ ഫണ്ടുകള്‍ വ്യാവസായിക തന്ത്രപ്രധാന നിക്ഷേപമായി മാറും എന്നതാണ്. ഇതു ശരിയല്ല എന്നു പഠനങ്ങള്‍ കാണിക്കുന്നു. ഈ രാജ്യങ്ങളിലൊന്നും വെഞ്ച്വര്‍ ക്യാപ്പിറ്റല്‍ കമ്പനികളിലോ ഗവേഷണ- അടിസ്ഥാന സൗകര്യ സ്ഥാപനങ്ങളിലോ കാര്യമായ ഒരു ചലനവുംപെന്‍ഷന്‍ഫണ്ടുകള്‍ ഉളവാക്കിയിട്ടില്ല. 

ശരാശരി പെന്‍ഷന്‍ഫണ്ടിന്റെ ഫലം ആകെ മൂന്നുശതമാനം ക്ഷേമത്തിലുള്ള നഷ്ടമാണെന്നാണ് നൂറുകണക്കിന് പെന്‍ഷന്‍ ഫണ്ടുകളുടെ പഠനങ്ങള്‍ കാണിക്കുന്നത്. കൂടാതെ പുനര്‍ ക്രമീകരണത്തിന്റെ ചെലവും പലപ്പോഴും വീണ്ടും ബജറ്റില്‍ നിന്നും നല്‍കണം. ജനറല്‍ മോട്ടോര്‍സിനെ യു. എസ്സും യു.ടി.ഐ.യെ ഇന്ത്യാ സര്‍ക്കാരും രക്ഷപ്പെടുത്തിയതുപോലെയുള്ള രക്ഷാമാര്‍ഗവും സര്‍ക്കാര്‍ ഒരുക്കേണ്ടതായി വരുന്നു. പെന്‍ഷന്‍ഫണ്ടുകള്‍ ഒരു ഫ്രാങ്കന്‍സ്റ്റീന്‍ ഭീകരന്‍ ആണെന്നല്ല ഇതിനര്‍ഥം. ശരിയായി ക്രമീകരിക്കാതെ എടുത്തു ചാടി നിക്ഷേപിക്കാന്‍ പറ്റിയ ഒരന്തരീക്ഷംഇനിയും നമുക്കുണ്ടായിട്ടുണ്ടോ എന്ന് പരിശോധിക്കണം എന്നു മാത്രം. വ്യാവസായികമേഖല കേന്ദ്രീകരിച്ച് വിജയകരമായി നടത്തിപ്പിലെത്തിച്ച ശേഷം സര്‍ക്കാര്‍ പെന്‍ഷനുകള്‍ മാര്‍ക്കറ്റില്‍ വിജയിക്കുന്ന മികച്ച റേറ്റിങ്ങുള്ള ഫണ്ടുകളില്‍ നിക്ഷേപിക്കുന്നത് കുറേക്കൂടി നിരീക്ഷണ സൗകര്യം തന്നേനെ. സാങ്കേതിക-വ്യാവസായിക മേഖലയിലെ പെന്‍ഷന്‍ രഹിത വിഭാഗങ്ങളില്‍ വളര്‍ന്ന ഒരു ദേശീയ പെന്‍ഷന്‍ ഫണ്ടുപോലും ഇല്ലെന്നതോര്‍ക്കണം. ഇതിനുള്ള സാവകാശം ഏറെ വൈദഗ്ധ്യം ഈ മേഖലയില്‍ ഉളവാക്കിയേനെ. 

നിയമ ദൃഷ്ടിയില്‍ സര്‍ക്കാര്‍ ജീവനക്കാര്‍ക്ക് രണ്ടുതരം പെന്‍ഷന്‍ ദുര്‍ബലമാകാന്‍ ഇടയുണ്ട്. അനുച്ഛേദം 14ന്റെ നിര്‍വചനത്തില്‍ തുല്യസ്ഥാനീയര്‍ക്ക് രണ്ടുതരം ചട്ടം ബാധകമാക്കാന്‍ സര്‍ക്കാരിനുള്ള അവകാശം പരിമിതമാണ്. മാര്‍ക്കറ്റ് നല്‍കേണ്ട പെന്‍ഷന്‍ സ്റ്റാറ്റിയൂട്ടറി പെന്‍ഷന്‍കാരെ അപേക്ഷിച്ച് കുറഞ്ഞതോ കുറഞ്ഞ ടേംസുള്ളതോ ആണെന്നു വരികിലോ പെന്‍ഷന്‍ഫണ്ടുകള്‍ തുടരെ പരാജയപ്പെടുകയോ ചെയ്താല്‍ കോടതികള്‍ മാര്‍ക്കറ്റ് അധിഷ്ഠിത പെന്‍ഷന്‍കാരുടെ സ്റ്റാറ്റിയൂട്ടറി അവകാശം പുനഃസ്ഥാപിക്കുകയും സര്‍ക്കാറിന് പരാജയപ്പെട്ട ഫണ്ടിന്റെ ബാധ്യതയും പെന്‍ഷണര്‍മാരുടെ ബാധ്യതയും ഏറ്റെടുക്കേണ്ടിവരാനുള്ള വിദൂരസാധ്യതയും കാണാതിരുന്നു കൂടാ. ഇത്തരം അപകടങ്ങളുടെ ഒരു സാധ്യതാവിശകലനവും വളരെ അനിവാര്യമാണ്. വെളുക്കാന്‍ തേച്ചത് പാണ്ടാകരുത്.

വയോജനങ്ങളുടെ നിലനില്പിനാധാരമായ പെന്‍ഷനുകള്‍ കോര്‍പ്പറേറ്റുകളുടെ പകിടപ്പണമായി മാറാതിരിക്കാനുള്ള ജാഗ്രതയും മാറ്റങ്ങള്‍ക്കൊപ്പം വേണം.