For most employed persons, March 31 — the end of the fiscal year — is a worrisome deadline when income tax returns have to be filed and sundry premiums and other payments have to be made. But the end of the financial year just gone by saw another phenomenon in Kerala — around 23,000 employees in different Government departments (including around 7,000 school teachers) retired from service that day, en masse.
This was the result of the Left Democratice Front (LDF) Government's decision last year to unify the retirement date of State Government employees to March 31. The implication was that all those who had reached 55 years of age any time during a financial year, could continue in service until March 31.
As a result of this move, there will soon be more pensioners than active serving Government employees in Kerala — both nudging the 5.5 lakh figure. The imminent impact of this dichotomy on the State's exchequer could well be dire. Consider this fact: The retirement age for the State Government service is 55 years. The average life expectancy in Kerala is 72 years. From these two counterpoised facts can be derived this unsettling conclusion — Kerala is set to bear the brunt of the largest future pension liability for each newly retired civil servant, more than any other State in India.
Pension burden
According to analysts, Kerala's pension burden has been rising rapidly since the mid-1970s. Over the 30-year period since then, it has been growing at the rate of around 22 per cent, touching 26 per cent in the 1996-2000 period.
Demographer Mr S. Irudaya Rajan has used population projections to predict that the elderly population in Kerala will increase from 2.2 million in 1986 to 4.6 million in 2011 and to 8.3 million in 2026. The factors that contribute to population aging include: (i) decreases in fertility and mortality; (ii) decline in the infant mortality rates, from 242 per 1000 live births (1911-1920) to 30 per 1000 live births in 1985; (iii) from 1971-1981, a substantial improvement in the mortality rates for ages 0-14, but only a marginal change among youth and a moderate decline in the middle ages and among the elderly; (iv) higher mortality rates for men (except for ages 35-39) than for women; (v) the highest life expectancy in India, which is also increasing; and (vi) a higher total fertility rate.
There are other perturbing aspects of Kerala's ageing population: Over 80 per cent of Kerala's elderly population reside in rural areas, and in 2026, more women will be in older age groups than men. By 2026, predicts Mr Rajan, Kerala will have 6.3 million people aged 60-74 and 2 million people aged 75 and older.
According to the Kerala Finance Minister Mr T. M. Thomas Isaac, with the Government approving the proposals of the Pay Commission, the Kerala exchequer has to face an annual commitment of Rs 2,000 crore. Coupled with the burden of dishing out pensions to nearly 5 lakh ex-government employees, Kerala's treasury will certainly not be a place to seek tranquility.
(The writer can be contacted at >kgkumar@gmail.com )