6th International Policy and Research Conference on Social Security

Emerging trends in times of instability: New challenges and opportunities for social security
Luxembourg, 29.91.10.2010

Improvements in life expectancy and sustainability of social security schemes: A challenge worldwide

Bimal Kanti Sahu Employees State Insurance Corporation India

www.issa.int

4 route des Morillons Case Postale 1 CH-1211 Geneva 22

The International Social Security Association (ISSA) is the world's leading international organization bringing together national social security administrations and agencies. The ISSA provides information, research, expert advice and platforms for members to build and promote dynamic social security systems and policy worldwide. The view and opinions expressed here do not necessarily reflect those of the ISSA. International Social Security Association, 2010.

IMPROVEMENTS IN LIFE EXPECTANCY AND SUSTAINABILITY OF SOCIAL SECURITY SCHEMES: A CHALLENGE WORLDWIDE

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A Short Summary of the contents:

The challenge of increasing longevity and shift in Dependency Ratio on the sustainability of Social Security Schemes all over the world with special reference to India. The presentation and analysis is statistical and inferences are empirical. The study have time and geographic dimensions and spans from as far back as 50s of the 20th century to the most recent data available the study also gave the projections of the decadal variations in the varied para-meters in the coming years and decades of the present century upto 2050. The source material for this study is the authoritative Government Publications. The findings that study gave out is that increasing longevity in conjunction with the BABY-BOOM of the preceding century has severally affected and afflicted the developing countries overstrained resources And the lesson learnt from this study is - a multi-pronged and integrated approach, i.e. trickle down cushioned with targeted approach - specific programmes for such segmented sections of society so afflicted by the shift in dependency ration should be the soul of successful and sustainable Social Security Policy and Programme.

1. ABOUT LIFE EXPECTANCY

Adaptability, Acceptability & Sustainability is the tri-pod of the philosophy, the policy and programmes of a sound social security dispensations. Improvement in life expectancy, globally and in each country and continent of the world together with the BABYBOOM of the 50s and 80s of the preceding decade has thrown a new challenge to devise a policy and programme to the benefit of 60+ age group people - a policy and programme that squarely meets this challenge and at the same time be affordable and sustainable in the short run and in future as well. Most importantly, it has time and geographic variance. As such, Social security to be meaningful have to adapt to the socio-culturalpolitical milieu of the society, the country at large, at that particular epoch of time. Any goodintentioned programme of social security unless & until accepted by the target group gets greatly devastated. Thus the willing reciprocation is required for the sound and smooth working of any such programme. Needless to emphasize, finance is the life blood of any successful programmes and actions. Consequently, the financial viability to sustain and survive such social security programmes in the long run with strength it is of utmost importance, nay, a sine-qua-non that due care and attention is given to the status and condition of the economy of that society and country for which it is meant to. I, a representative of an organization, the Employees State Insurance Corporation of India that provides social security benefits coverage to 46.8 millions beneficiaries hails from the worlds second most populous country that have cherished and nurtured with a vibrant democratic regime and has stridden on the path of development with peoples participative approach and a commitment given to the

people through its constitution i.e. the Preamble and the Directive Principles, feel highly thankful & obliged to this august organization by giving me an opportunity to express myself and submit this paper. The demographic transition that has dawned during the preceding century, the 20th one, had thrown varied challenges in divergent dimension. The fact of high birth rate coupled with high death rate transformed initially in high birth rate but declining death rate which ultimately ushered to the phenomena of low birth rate and low death rate. The period of Great Divide of the demographic transition, the period which spanned from the 50s to 60s and lasted till 80s of preceding century resulted in a very high growth rate of population crossing even 2.5% growth, which we call today as the period of Baby-Boom. But, this period also synchronized with the developments in the political set up and subsequent economic pace of growth in many countries of the world especially of Asia, Africa & latin America. This growth has percolated to all the dimension of quality of life of the common man which resulted in the general upswing in the life expectancy. The social security dispensation of the countries has been greatly affected by this development as the Baby-Boom of the 50s to 80s of the preceding century coupled with improvement in life expectancy has thrown a great challenge in this 21st century- the challenge of not only looking for and caring the working population but also the fast expanding non-working groups i.e. the people who are out of employment, the children, the old age people together with partially or permanently disabled population et al. This deteriorating dependency ratio and increasing longevity is the theme of this paper which though had taken a global glimpse of the social security efforts especially in the realm of old age benefit programme in developing countries of Asia, Africa & Latin America with special reference and emphasis on the efforts taken and being taken together with the challenges that are faced by the Indian government which is committed to provide social security to all its citizens, synchronizing with the goal of ILO. The change in the demographic denominator during the decades of the second half of the preceding century together with the developments in living standards and quality of life, increased availability of better medical care has shown its impact on increased life expectancy. Declining fertility of the decades of the second half of the preceding century together with increasing life expectancy had given a skewed distribution in favour of population in the age group of 60 +. It had thrown a great challenge to meet the necessities of life of this group of population now reaching to the status of the non-working population. Of course the Continents, Regions & Countries of the world do differ in vital statistics of population, gross national income, per capita income and the growth rate of the economy which itself illuminates and illustrates the interplay of improvement in life expectancy and its impact on the sustainability of the social security scheme. It get discerned when we analyze the vital statistics pertaining to the population matrix of the world over the years starting from 1950 and go with the projections of the United Nation Population Division for the period upto 2050. The world population which was 252.9 crores in 1950 reached to double itself by 1990 reaching to the level of 529.04 crores. It is projected to be around 690.9 crores in 2010 and is expected to reach to the level 830.9 crores in 2030 and 915 crores in 2050. The continental distribution of this population during the period showed that the population of Asia which was 140.3 crores in 1950 had reached to 370.9 crores in 1990. In 2010 it would be around 416.7 crores and is projected to reach the level of 491.7 crores in 2030 reaching to the level of 523.1 crores in 2050. Whereas the population of Africa which was 22.7 crores in 1950 reached to 63.8 crores in 1990. It will be around 103.3 crores in 2010 and 152.4 crores in 2030, reaching to the level of 199.8 crores in 2050. The population of Europe which was 54.7 crores in 1950 and 72.1 crores in 1990. It is projected to reach to 73.3 crores in 2010. It is projected to register a decline and may reduce to 72.3 crores in 2030 and would be around 69.1 crores in 2050. The Latin American and Caribbean countries have a combined population of 16.7 crores in 1950 which reached to 44.2 crores in 1990. It is projected to be around 58.9 crores in 2010 reaching to the level of 73 crores in 2050.

Population (in crores)

The growth in population has also altered its density.

The density of population which was for the

world as a whole 19 in 1950 reached to 39 in 1990. It is projected to be around 51 in 2010 and 61 in 2030 and finally reaching to 67 to 2050. In Asia the corresponding figure was 44 in 1950 which

reached the level of 100 in 1990 and it projected to be around 131 in 2010, 154 in 2030 and about 164 in 2050. In case of Africa this figure was 7 in 1950, 21 for 1990, 34 in 2010, 50 for 2030 and 66 for 2050. For Europe, the density which was 24 in 1950 reached to 31 in 1990 which will be around 32 in 2010. It is projected to decline to 31 in 2030 and further declining to 30 in 2050. For Latin American and Caribbean Countries, it was 8 in 1950 reaching to the level of 22 in 1990. It is projected to be around 29 in 2010, 34 in 2030 and 35 in 2050. Density of Population

The population of the world had grown at a rate of 1.77% during 1950-55 showed a decline to 1.54% during 1990-95. It is projected to register a further decline during 2010-15 to 1.11% and to 0.62% during 2030-35 and to 0.34% during 2045-50. The corresponding figure for Asia is 1.89% during 195055, 1.63% during 1990-95, 1.05% during 2010-15 and further to 0.47% during 2030-35 and 0.15% during 2045-50. In case of Africa the corresponding figure is 2.18% during 1950-55,2.57% during 1990-95, 2.20% during 2010-15 and 1.56% during 2030-35 and 1.14% in 2045-50. For Europe this figure was 1% during 1950-55 which reached to 0.18% during 1990-95. It is projected to be 0.03% during 2010-15. Since then the projection was of negative growth rate in population i.e. (-) 0.2% The corresponding figure for Latin America and

during 2030-35 and (-) 0.26% during 2045-50.

Caribbean is 2.71% during 1950-55, 1.73% during 1990-95, 0.99% during 2010-15 and further to 0.47% during 2030-35 and 0.10% during 2045-50.

Growth rate of population

The life expectancy over the year had shown a consistent increase. The life expectancy at birth for world as a whole which was 46.6 years during 1950-55 reached to 65.2 years during 1990-95. It is projected to be around 68.9 years during 2010-15, 73.1 years during 2030-35 and 75.5 years during 2045-50. For Asia, the corresponding figure was 41.2 years during 1950-55, 64.2 years during 1990-95. It is projected to be around 70.3 years during 2010-15, 74.5 years during 2030-35 and 76.8 years during 2045-50. The corresponding figure for Europe was 65.6 years during 1950-55, 72.6 years during 199095. It is projected to be 76.1 years during 2010-15, 79.6 years during 2030-35 and 81.5 years during 2045-50. In case of Africa, the life expectancy which was 38.7 years during 1950-55 reached to 51.6 years during 1990-95. It is projected to be around 56 years during 2010-15, 62.8 years during 2030-35 and 67.4 years during 2045-50. In Latin America and Caribbean, the life expectancy at birth was 51.3 years during 1950-55 which increased to 68.9 years during 1990-95. It is projected to be 74.5 years during 2010-15, 78 years during 2030-35 and 79.8 years during 2045-50.

Life expectancy at birth

The declining fertility rate & increased life expectancy at birth had change the median age of the population. The median age of the population for the world as a whole which was 24 years in 1950 reached to 26.6 years in 2000 and is projected to be 61 years in 2030 and 67 years in 2050. The corresponding figure for Asia is 22.3 years in 1950, 25.8 years in 2000 and is projected to be 35.2 years in 2030 and 40.2 years in 2050. In case of Africa, the median age was 19.2 years in 1950 and 18.5 years in 2000. It is projected to be 23.4 years in 2030 and 28.5 years in 2050. The median age in Europe was 29.7 years in 1950 and 37.6 years in 2000. It is projected to be 45.3 years in 2030 and 46.6 years in 2050. In Latin America and Caribbean, the median age in 1950 was 20 years and 24.5 years in 2000. It is projected to be 35.1 years in 2030 and 41.7 years in 2050.

The declining fertility and the declining growth rate of the population during the last decade of the preceding century coupled with increased life expectancy has its impact on the increase in the population in the 60 + age group. For the world as a whole the percentage here had shown persistent increase, it was 8.1 in 1950 rose to 9.9 in 2000. It is projected to be 11 in 2030 and 21.9 in 2050. In

case of Asia, the corresponding figure was 6.7 in 1950 and reached to 8.5 to 2000. It is projected to be 16.7 in 2030 and 23.6 in 2050. For Europe, the corresponding figure was 12.1 in 1950 and 20.3 in 2000. It is projected to be 29.3 in 2030 and 34.2 in 2050. In Africa, 5.3% of its population was in the age group 60+ in 1950. It declined to 5.1 in 2000 but is projected to jump to 6.9 in 2030 and further to 10.6 in 2050. In Latin America and Caribbean, the corresponding figure was 5.6 in 1950 which was 8.3 in 2000. It is projected to be around 17.1 in 2030 and 25.5 in 2050.

The preceding denominators of the demographic matrix denotes that a great challenges lies and lies ahead in the coming decades to provide on sustainable basis a social security scheme that take cares of this 60+ population. It can be bracketed into nothing less than laudable the efforts made in this direction by the countries of Asia, Africa and Latin America which are at the comparatively same stage & pace of development facing almost the same constraint of daunting tasks with limited resource. These countries have treaded on the path of development since the second half of the preceding century after achieving freedom from foreign regime. Development that ushered in also get reflected in the demographic matrix of these countries i.e. declining birth and death rate, declining growth rate of population, increase in life expectancy, increase in the median age of the population together with increased per capita income with concomitant expectation of the people. Distribution of fruits of developments evenly came as a new daunting challenge. Trickle down theory worked but with limitations necessitating the more active role of the social security dispensation.

2. SUSTAINABILITY OF SOCIAL SECURITY:(i) Three aspects are to be considered when we are discussing to provide protection for the elderly population irrespective of countries of the world. They are (1) Sustainable monthly income (2) Institutional support and (3) Health Care. Apart from the problem of sustained monthly income in the form of pension during the old age, the elderly face another big problem, i.e. the health. With advancing age, chronic diseases seem to rush in. As much as 12% of our elderly population suffers from the debilitating Alzheimers disease which

requires expensive medication and institutional support which is not available due to fast disappearing joint family system. Apart from this, millions of elderly people have to face such chronic disease as diabetes, chronic bronchitis, asthma, arthritis etc. According to the national Sample Survey Organization, as much as 45% of the 70 million plus elderly persons in this country suffer 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 and premier medical institutions are not taking seriously the changing reality. According to a medical expert, even today geriatric medicine is not a specialized course in medical colleges and very few hospitals offer specialty services for the elderly. Though various State Governments in the States and Union Territories have introduced 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 limited coverage and very meager pensions. There is no national policy for welfare of the aged or 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 to take care of the aged as has been done by the Himachal State Government recently; and suggested by some experts i.e., to revive the joint family system by force of law or is it to force the working population to compulsory save and deposit in Private Pension Funds to get pension in old age. Such short cuts are not going to solve the problem. In fact, these may accentuate the problem. The only way out of this crisis is the well-tested method adopted throughout the world during the 20th century, which is to cover all citizens under Social Insurance and/ or Social Assistance Schemes. Whereas persons working in the organized sector and a section of the self-employed having sufficient income should be covered under Social Insurance Scheme, all other sections of people whether they are working in the unorganized sector or are self employed small and marginal farmers, artisans small shop keepers etc., should be covered under Social Assistance Scheme. To make such a scheme 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 Welfare Schemes for Beedi workers, Cine workers, employees in Iron ore, manganese or and Chrome ore mines, labour in limestone and Dolomite mines etc. (ii) However, with globalization and massive restructuring of old economies to new set ups, the financial institutions along with some big industrial multinationals began propounding the theory that the economies of not only the developing countries but also of the developed countries can no longer bear the burden of burgeoning social security expenditure, especially the expenditure on old age pensions and health protection. The reasons advanced were that longevity is increasing due to advances in the medical science. Because of continued research more and more medicines have been produced which cure many chronic diseases. Moreover, there was increasing consciousness, to live in better environmental conditions. Due to increasing reliance on family planning measures, 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 changes, the number of old people beyond the age of 60 years is increasing. In this regard, the director General of the ILO in his report on Social Protection in the 80th Session 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 longevity. From an average of 7.5 individuals of working age persons over 65 years in 1968, the O.E.C.D. average has successfully declined to 5.4 in 1990 and is expected to fall to 3.8 by the year 2020. By the middle of next century there will be just two persons of working age per person over 65 years. A similar trend is occurring in developing countries where population are ageing because of decline of birth rate and increasing life expectancy. 3. NATIONAL POLICY FOR OLDER PERSONS:-

The ageing of population is a global phenomenon. In 1950, there were about 200 million 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 22% of the total population. India is no exception to this trend. According to the 1991 census, the proportion of 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 in rural areas, and the female elderly out number the male elderly. According to the 42nd round of the NSSO, 34% of the rural elderly were financially independent as against 28.94% in urban areas, 12% of the male elderly were staying 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 to believe that an adequate number of voluntary organizations will come forward to set up so many old age homes. There is, therefore, no alternative to the Central and State Governments 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 service provided in these homes needs to be monitored. The existing arrangements in this regard are less than adequate. It is, therefore, necessary to establish a well-organized regulatory system to ensure that standards are maintained, and exploitation avoided. With the growth in the population of the aged, the associated problem of caring for the aged is becoming increasingly important. Lately, long term care of the elderly in some of the developed countries has been systematized in the form of social care insurance 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 encourage them to live with their families. This would also be consistent with our national tradition. Where there are either no families, or where the families cannot look after them, they would have to be provided with institutional care. Appropriate schemes would need to be designed for the health care as well as long term care of the elderly. It may be mentioned here that the health insurance schemes of two Private Insurers do not cover persons who are above the age of 70 who required greater attention, for reasons that are obvious. 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 marriage Act, 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, also known as alimony or allowance. Civil courts take a long time to dispose off cases. Even if a competent civil court passes a judgement and decree, execution takes months and even years due to cumbersome legal procedures. Even before the maintenance is realized the decree holder may die of starvation. Realizing the above, the right to maintenance has been incorporated in Chapter IX of the Criminal

Procedure Code (Cr.P.C.). It is entitled 'order for maintenance of Wife, 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) his legitimate 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 to maintain itself, or (d) his father or mother, unable to maintain himself or herself, a magistrate, 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, father or mother, at such monthly rate not exceeding five hundred rupees on the whole, as the magistrate thinks fit, and to pay the same to such person as the magistrate may from time to time direct. A ceiling of $10/- per month towards maintenance will not prevent vagrancy though that is the object of the provision. Various women's and civil rights organizations and other activists have raised their voice against this ceiling. In West Bengal the amount was raised to $32 /-.

In Tamil Nadu, after a long debate with various sections of society and women's organizations and the Tamil Nadu Women's Commission, it was decided to amend the Cr.P.C. and remove the ceiling, and to vest in the magistrate, the power to grant maintenance in his discretion, taking into account the capacity of the person to pay, and the 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 Central Government for obtaining Presidential assent. In the meantime, the Government changed, and the Bill has been withdrawn on the ground that the Central Government itself is contemplating a similar amendment. In sum, the Union Law Minister announced that the Government of India is planning to enhance the interim maintenance limit for an estranged wife from the existing $10/- to $100 on the recommendation of the Law Commission. We are glad to learn that this has now been done through an amendment to Section 125 of the Cr.P.C. We welcome this move and suggest that the ceiling on the amount to be paid for maintenance 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." 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 the community such as manning child care centres, cultural clubs, vocational training centres, etc., for which they may be paid appropriate remuneration.

4. PRESENT SCHEMES FOR OLDER PEOPLE IN INDIA:(i) National Old age pension scheme (NOAPS):- A tax-financed programme managed by the Union and State Governments. The scheme is implemented with the Assistance of the local self government (Panchayats and Municipalities) in the delivery of social assistance to make it more responsive and cost effective. At present, the beneficiary must be 65 years or older and a destitute in the sense of having little or no regular means of subsistence from his/ her own sources of income or through financial support from family members or other sources. The Honble Prime Minister of India in his independence speech made on 15th August 2007 announced that we will provide an old age pension to all citizens above the age of 65 years and living below the poverty line. On 13th July, 2006 the Central Government approved the increase in the pension given to a beneficiary under the scheme from Rs. 75/- ($2) to Rs. 200/- ($5) per month. With the modified criteria proposed to be changed from destitute to a household below the poverty line (BPL) it is estimated that the beneficiaries t be supported under the scheme would come to around 15.7 million.

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(ii) Protection to elderly parents:- Section 125 of the Code of Criminal Procedure 1973 provides that if any person leaving sufficient means neglects or refuses to maintain his father or mother, unable to maintain himself or herself, a magistrate on proof of such neglect or refusal, order such person a monthly allowance for the maintenance of his father or mother at such rate as the Magistrate thinks fit, and to pay the same to such person as the Magistrate directs from time to time. The Government of India is also, contemplating a comprehensive legislation for protection of old aged persons by casting liability on their children having sufficient means to support them.

(iii) The National Rural employment Guarantee Act, 2005:- has been enacted to guarantee 100 days of employment in a year to any rural household. The Act came into force initially in 200 districts which Prime Minister of India announced on 15th August, 2007 to extend to entire India. (iv) Coverage of home-based workers by NGOs and self help groups:- NGOs and Selfhelp groups in India are taking up a large number of schemes for home-based workers to provide them social protection through health care, child care, micro-financing, work security insurance, housing and infrastructure, capacity building etc. One such example can be given regarding Self-employed Womens Association (SEWA) which has registered 93,000 women with Savings Accounts who avail the services of loans and credit facility etc. SEWA banks scheme has provision for Crisis Mitigation, Housing Finance, Women farmers Credit, Savings for Special Events, Sunrise Scheme for developing Womens Businesses and empowerment of Women. Several hundreds of NGOs are being funded by the Central Ministries as well as the State Governments to provide specific social security to the marginalized groups of society such as Scheduled Castes, Scheduled Tribes, Physically challenged, Minorities, other backward classes, Self-help groups catering to problems of women and children in the form of financial assistance for education hostel facilities, scholarships, vocational training, employment generation, old-age homes, nutrition, health-care insurance etc. (v) A few examples of other retirement programmes extending social security benefits. Programme Name Coverage Civil Service Pension Scheme, New Pension Civil servants at state and central government System & General Provident Fund level Special Provident Funds & Pensions Schemes Applies to workers in particular sectors:- Coal mines, tea plantation, Jammu and Kashmir, seamen, etc., Public Provident Fund All individuals are eligible to apply VRS Plans Employees as decided by respective establishments Personal Pension/Senior Citizens Saving Scheme All eligible individuals covered by both the Government & Non-Government agencies, such as mutual funds insurance companies, Postal department etc.

(vi). Employees State Insurance Scheme, Government of India:(a) Old age care in ESI Scheme : Elderly workers covered under the ESI Act. have all the benefits i.e. medical and cash benefit provided by ESI Scheme i.e. medical care for self and family, specialized and super specialty and cash benefit in the contingency of sickness accidents, occupational diseases and death. (b) After retirement on superannuation, any such covered employee is entitled to get a reasonable medical care for himself and his spouse at a nominal cost of $0.2/- per month.

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5. KEY POLICIES FOR SUSTAINING SOCIAL SECURITY FOR AGED POPULATION Key polices on health care financing: Mobilizing sufficient resources for achievement of policy objectives. Equity and solidarity in financing through burden sharing by income level Setting up risk equalization and solidarity funds where appropriate Maximizing risk pooling and reducing fragmentation In insurance schemes government subsidies for the poor and informal sector workers and their families (either direct or for contributions/premiums) Minimizing out of pocket payments User charges referring to the capacity to pay Financial sustainability Using a mix of health financing mechanisms to accelerate achievement of universal coverage and balance equity, efficiency, and quality of care. Efficient and effective use of resources. Usually, extending social health protection requires increasing funds, particularly in public spending on health. However, in many middle and high-income countries revenue collection based on public funds and payroll taxes often encounter perceived limits. The spending on health is perceived as unproductive cost that hampers economic development. In many low-income countries fiscal space and domestic revenues are considered too limited to ensure access to health services for the majority of the population. Further, mobilizing additional government resources usually requires functioning formal economy whereas in many low-income counties large informal economies exist. Increasing fiscal space is key for increased sustainability of social health protection. It often involves changes in governments policies and for countries relying on international aid- more sustainable support from donors. Most successful methods to increase fiscal space through government policies include: More efficient use of public expenditure; Strengthen efficiency in public institutions and service delivery; Budgetary reallocations; Increased efforts to collect taxes and contribution; and Introduce new sources of funding for the national health budget.

6. FUTURE CHALLENGES:The ageing population is posting further challenges for the Social Security Scheme. India is experiencing a demographic transition which is discernible in lower total fertility rate; slided down from 5.91 during 1950-55 to 3.11 during 2000-05, increased life expectancy from 37.9 years during 1950-55 to 62 years during 2000-05 (Male 60.9 years and female 63.3 years) and ever increasing proportion of the old aged and elderly in total population. The share of elderly, person aged 60 years and above, in Indias total population increased from 5.4% in 1950 to 7.00% in 2005 and is projected to be around 12.4% in 2030, that is, 60 plus people in Indias total population in 2030 would be around 184 million. Providing secure and sustainable retirement income, therefore ranks high in the social security programmes. The process of globalization of economies has thrown new challenges. In order to cope with increased competition and to reduce production and labour costs, there is a tendency among the employers to sub-contract or outsource some of the work to smaller players. Thus, the work which was hitherto carried out by the regular workers in the factories is now outsourced to smaller establishments and casual workers who are mostly in the informal sector. Further, due to constant upgradation of technology workers not having the required skills lose their jobs and this has resulted in a trend of more and more workers in less secure employment.

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If consequences of these changes in the economy and the society are not appropriately addressed, the economic reforms initiated in 1990s will lose its justification and sustainability. Moreover no democratic government can ignore social security needs of majority of its population. On one hand there are serious compulsions for the government to extend social security coverage, on the other hand there are severe resource constraints in financing universal social security programmes. Under these circumstances Indian government as well as civil society has been venturing into alternative strategies and mechanisms for universalisation of social security programmes for its citizens. These initiatives need a closer look from the perspective of their feasibility, affordability, outreach, sustainability and effectiveness. 7. CONCLUSION: - At the end what is needed is collective responsibility based on participatory approach in which political parties, employers, trade unions, NGOs and above all the National Government are required to come together to take up the challenge of providing social security for all and particularly, for the ageing population who have contributed immensely during their younger days for the development of the respective countries in the world. This is to ensure that such senior citizens live the rest of their lives with human dignity and social justice.

8. SUMMARY:i. ii. iii. iv. v. vi. vii. viii. ix. There has been tremendous increase in the elderly population throughout the world due to increase in life expectancy and declining birthrate. With breakdown of traditional family bondage and shifting working population, social security for the aged is diminishing. Now, it is the challenge for the society and Government to take care of the aged population. Issues like provision of health care, and cash benefit during contingencies of illness and death require attention. Funding and proper institutional support are important for a sustainable social security. The present schemes for older people require a re-look. There is a requirement for a national policy for older persons. Participative approach through dialogue is essential to meet the challenge. All have to come together with a mission to provide health to older so that they live their lives with dignity.

( B.K. Sahu ) Insurance Commissioner ESI Corporation NEW DELHI (INDIA Email : bk_sahu04@yahoo.com ins-comm@esic.nic.in

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