Says pension costs will touch Rs.8 lakh crore by 2040 if left unchecked
Chief Minister Oommen Chandy has said that the State government will face a staggering commitment to the tune of Rs.8 lakh crore by 2040 unless the contributory pension scheme is implemented.
Addressing a session at the Pravasi Bharatiya Divas here on Wednesday, Mr. Chandy said the burden on the government in terms of pension rose from over Rs.2,000 crore to Rs.8,000 crore during a decade between 2001-02 and 2011-12.
During the next 10 years, it would rise to more than Rs.18,000 crore and in 20 years, to more than Rs.2 lakh crore, he said, explaining the reasoning behind the hard-nosed stance of the State government against the indefinite strike called by pro-Left and pro-Bharatiya Janata Party service organisations against the introduction of the contributory pension scheme.
Mr. Chandy said that owing to a combination of factors from high life expectancy to low pension age, the number of people in service and those retired hovered around a figure of five lakh. The number of pensioners would continue to go up, and end up as a huge liability for the government unless the pension system was reformed.
The government would be doing a great disservice to future generations if it failed to act now, as the cost would be more catastrophic than that of the anti-computer agitation years ago. The State which otherwise would have emerged at the top of the IT bandwagon had suffered dearly on this account, dealing a huge blow to a generation. While IT exports of neighbouring Karnataka stood at Rs.77,000 crore, Kerala lagged behind with a meagre Rs.3,200 crore, Mr. Chandy said.
The State, he said, would have to take some hard decisions, especially in the area of infrastructure development. Projects should not be dropped at the first sign of resistance. Without proper infrastructure, investment flow to the State would dry up, leading to job loss.