The Economic Survey 2018-19 has made a strong case for increasing retirement age in the wake of the rising life expectancy rate in India. That's the impression you get if you go through CEA Krishnamurthy Subramanian's Economic Survey that was presented in Parliament on Thursday.
India is set to witness a sharp slowdown in population growth in the next two decades as it is expected to grow under 0.5 per cent during 2031-41 due to decline in fertility rate and rise in life expectancy, the Economic Survey stated.
As of now, the retirement age for government employees is 60 years in India.
"Given that life expectancy for both males and females in India is likely to continue rising, increasing the retirement age for both men and women going forward could be considered in line with the experience of other countries," said Finance Minister Nirmala Sitharaman while presenting the Economic Survey 2018-19 in the Parliament on Thursday.
The survey pointed that due to ageing population and increasing pressure on pension funding, many countries have begun raising the pensionable retirement.
Countries such as Germany, France and US have already increased the retirement age. Some countries such as Australia and UK used to allow women to retire earlier than men but have changed the rules to bring them at par.
"Since an increase in the retirement age is perhaps inevitable, it may be worthwhile signalling this change well in advance - perhaps a decade before the anticipated shift - so that the workforce can be prepared for it," said Nirmala Sitharaman.
India's healthy life expectancy at the age of 60, which is the average number of years a 60-year old person is expected to live in full health taking into account the impact of diseases and injuries, has continually increased over the years for both men and women. Healthy life expectancy at the age of 60 now stands at 12.9 years (12.5 years for males; 13.3 years for females), though it is still much lower than that for other major developed and emerging economies.
The survey reported that working-age population in India will grow by roughly 0.97crore per year during 2021-31 and 0.42 crore per year in 2031-41.
Edited by Chitranjan Kumar