Wednesday, December 3, 2008

Global Economic Recession and Indian Senior Citizens

Global Economic Recession and Indian Senior Citizens



"My son has got the Red Slip last week. I don't know how to pull on"

"My Interest earnings have gone down but inflation is increasing day by day"

"Dependencies are never ending. Our daughter has joined us leaving her husband abroad -- My responsibilities never seem to end"


Such are groaning scenarios among senior citizens in any park or in Day Care centers or among morning walkers.. Here are a couple of suggestions to handle this issue.

Present Economic crisis around the world has resulted in many youngsters losing lucrative jobs abroad or having been forced to accept lower salaries elsewhere. This impacts senior citizens back at home. They have to tighten their belts and get used to living frugally or make unexpected sacrifices. To tackle this central government may come up with some kind of Senior Citizens Income generation schemes or self employment avenues or re-employ retired people with a view to rehabilitate them.

Recently SBI has sent me a letter (quoting my PPF account) announcing higher rates of Interest for Fixed Deposits (11%) for 1000 days. It is an indirect hint that I transfer some funds in PPF yielding only 8% to new FD at higher rates. How about the SBI sending a simple letter asking "Do you want the balance in your PPF account to be kept as Special FD at higher rates" and if the answer is yes  transfer the money to FD and reverse it to PPF after 1000 days? This is just a matter of a few clicks on the computer, if properly programmed. Banks want liquidity; seniors have some money to invest and they would like to have better interest. This 'auto-sweep' facility may be applied in the case of senior citizens without asking. Who will not do with a little more money?


The same idea may be applied to other FDs in Banks too whenever better and short term schemes are brought out. Banks should be pro-active to help senior citizen customers and it they who would appreciate such facilities best.

Popularize Reverse Mortgage schemes and make them simple to avail. There are a number of problems in the actual implementation and a lot of vagueness and discretion is allowed at each scheme operators level. Streamlining reverse mortgage schemes will be a boon to senior who are waiting for the dust to settle down.

Health Insurance makes sense only when large number of subscribers is involved. BSNL offers free accident insurance to all subscribers for Rs 50K per subscriber.  Why not something similar -- Health Insurance scheme where premiums are affordable and millions are covered in some automatic manner. Instead of lowering Income Tax Rates, Govt may offer free insurance for the premium amount of IT they are prepared to 'sacrifice'! This will ensure a large subscriber base and many companies may come up with new schemes.

In the case of BPL seniors, sudden demise of the earning member (son/DIL/daughter etc) may worsen the financial position. Compulsory Life insurance schemes (partly funded by Govt -- premium paid) for all employed or salaried persons may be so devised that part of the Proceeds (death claims) go to senior citizens instead of entire money going only to the nominee.


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