Economic Survey Proposes Increase In Retirement Age

The Economic Survey that was tabled by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman in the Parliament today, proposed to increase the retirement age of the work force.

Economic Survey: The Economic Survey that was tabled by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman in the Parliament today, proposed to increase the retirement age of the work force. (Representative photo: Getty images)

Economic Survey: The Economic Survey that was tabled by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman in the Parliament today, proposed to increase the retirement age of the work force. However, this could be considered given that life expectancy of both males and females is likely to continue rising, the survey stated. “This will be a key to the viability of pension systems and would also help increase female labour force participation in older age groups,” said the survey. Talking about the implication for working age population, the Economic Survey stated, "Its size plays a key role in determining the size of labour force and direction of inter-state migration." It further stated, "Depending upon the trajectory of labour force participation during 2021-41, additional jobs will need to be created to keep pace with the projected annual increase in working age population."

Demographic trends suggest need to prepare for ageing of the population; this necessitates more healthcare investment, increasing retirement age in a phased manner

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The States with rising working age population could meet the labour deficit in many ageing States. The current migration trends broadly follow this pattern. The change in demographic break-up has several policy implications such as those on elementary schools, health care facilities and deciding the retirement age. With India’s health life expectancy (which is currently the age of 60) continuously increasing over the years for both men and women, and given that it is likely to continue rising, increasing the retirement age for men and women could be considered in line with the experience of other countries.