Panaji, Feb 20 (IANS) RBI governor Raghuram Rajan Friday said that ideally, pensions for the elderly should not just be inflation-indexed but also indexed for real-value (which adjusts for the effect of inflation).
He said this while stressing the need for curbing inflation as it works as a tax against those in their twilight years.
Speaking during an ongoing lecture series here, the Reserve Bank of India (RBI) governor also made a case for equity-linked pension while admitting that as India gets richer, pension in the current form does not help preserve the status of an individual like it used to a decade ago.
"The government can create a minimal pension, which it has in a number of areas, especially for the very poorly off in society. But going forward we have to develop better methods of savings. Savings that ensure... that your pensions are not just inflation-indexed, but even real-value indexed," Rajan said.
He also said that to ensure that pensions are indexed at real value, linking the pension corpus to equity was important.
"So in those kinds of saving plans I think some amount of equity is very important," Rajan said.
The top official also admitted that in contemporary India, with its upward rising economic trajectory, mere pensions could not alone could not guarantee the same economic solace as they used to in the past.
"But there's another aspect to pensions which are a source of concern for the elderly, that is the country is becoming richer so a pension today does not preserve the same status even if it is inflation indexed, that it would have got you 10 years ago because everyone else is moving ahead," he said.
Rajan said that it was imperative to arrest inflation, because it ended up taxing those in the twilight years of their lives.
"I hope that unlike China we will grow wealthy before we grow old. China unfortunately is growing old before it really gets wealthy.
"Hopefully, we will not face the same situation. So we should be prepared and therefore pensions I think are one extremely issue today," the RBI governor added.
India achieved a big victory of 302 runs over Sri Lanka in the 33rd match of the World Cup 2023.
Reports of my non-cooperation in Sunanda probe false: Tharoor
Thiruvananthapuram, Feb 15 (IANS) Congress leader Shashi Tharoor, who was last week questioned
Now more than a month is left for the final of the ICC Test Championship. India and New Zealand t
West Bengal elections: Has Abbas Siddiqui made Mamata Banerjee sleepless?
The Pir, which the locals call Dada Huzur, was a Sufi saint of the 19th century. He did many thin
The Indian team has fallen 0-1 in the five-Test series after losing the first Test at the hands o
Coronavirus News Updates: PM Modi’s Video Conference With CMs Begins, Word On Lockdown Awaited
कोरोनावायरस (COVID-19) लाइव अपडेट: भारत के 21
Arvind Kejriwal government's 'Red Light on Car Off' campaign is once again in discussion in Delhi
The cases of the corona virus are increasing continuously in China. Because of this restrictions
He's Accused Of Inciting Bandra, Mumbai Gathering Via Tweets, Facebook
मुंबई: कल शाम मुंबई के बांद्रा स्टेशन
Haryana's botched-up eye camp held without permit
Chandigarh, March 24 (IANS) A recent eye camp in Haryana's Panipat district, where 19 elderly p
