Logic behind pension age hike

Things are already set to increase pension age of government employees in Kerala. Government is planning to raise pension age from 56 to 58. The same has been announced in the house by the honorable finance minister Shri. K.M. Mani. It was four months ago that the pension age was upped from 55 to 56. As per the reports, existing scenario is very alarming; "Today, there are 5.34 lakh state government employees and 5.50 lakh state government pensioners. Also, an average, a state government employee works in the government for 25 to 30 years, while a pensioner has to be paid pension for around 25 to 30 years. Every year, Rs.7,731 crore goes to pay pension and this situation cannot go on for long," said Chandy. Government was hugely burdened with 75 percent of the state revenue going to pay salaries, pensions and interest on borrowings. Amidst financial crisis and increased expenditure, pensioners are becoming a huge liability to the exchequer. In order to reduce government spending and to utilize the expertise of experienced hands, government finds such a way in this impasse. If they are given another two years, the cash-strapped state government would save around Rs 375 crore this fiscal.  Even though the decision was warmly welcomed by the working class, youth movements and students federations vehemently opposed this move.  

Normally around 20000 people retires every year and any decision to increase pension age may badly affect around 30 lakh (45 lakh as per Employment Exchange) unemployed youth of Kerala. In these circumstances, this plan will almost freeze new recruitments and make the unemployment crisis more severe in coming two years. In the wake of the validity of the PSC list is one year, this will also affect the shortlisted candidates. Additionally, this move only has a temporary advantage and the same issue will emerge after two years with much vigor. In short, plan to raise pensions age do not have any long term significance and assumes bad effect to the society.  When opposition runs over their political survival, ruling party finds it as a chance to pass the decision. The silence of mere political fronts may favor this move and the hidden agenda to raise pension age to 60 might also happen.   

Albeit the finance minister proposed to reduce the age limit for PSC applicants - to console the youth population, the logic behind is totally unknown. The real fact is that, the decision to increase pension age is an act of adding oil to the fire. Instead of maintaining exiting staffs, government can curtail its expenditure by sourcing new candidates. It is true that, new generation can play a level playing role with current man power and the wage expense towards fresh candidates will be very low compared with their predecessors. The techno savvy youths can learn and contribute a large rather than any other and they also can contribute innovative ideas to ensure transparency, accountability and good governance.  What government should do is, curtail cost by adapting strategies like gradual reduction of pension, innovative incentive plans, early retirement opportunities and creating job opportunities for pensioners through outsourcing, contract/private jobs etc. instead of meager and politically motivated proposals.