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Social Security System in India: An International Comparative Analysis

Author

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  • Jha, Rupak Kumar
  • Bhattacharyya, Surajit

Abstract

This paper examines selected components of social security system in India and compares them with their OECD counterparts. Historically, the Indian policy makers have viewed the pension system as a welfare measure and therefore, it lacks in financial professionalism, diversification, and in the belief that pension funds can also be treated as an asset. The Indian system is biased towards the organized formal sector as workers in this sector are benefitted with the provisions under various labor laws. Even then the pension provisions in India are way far behind the OECD benchmark. In the unorganized sector, old age income remains mainly confined to voluntary savings. The New Pension System although makes the pension amount an old age asset, is silent on the social security provisions to the poor. The average income earners are not able to replace their pre-retirement earnings with pensions compared to most of the OECD countries. In terms of the gross pension wealth, India is nearer to the OECD average only in the low income category for men. Out of 5% of health care expenditure as a percentage of GDP, government’s share in India accounts even less than 1% which is significantly lower than the OECD benchmark.

Suggested Citation

  • Jha, Rupak Kumar & Bhattacharyya, Surajit, 2010. "Social Security System in India: An International Comparative Analysis," MPRA Paper 20142, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:20142
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    File URL: https://mpra.ub.uni-muenchen.de/20142/1/MPRA_paper_20142.pdf
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    References listed on IDEAS

    as
    1. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    2. Deaton, Angus, 1991. "Saving and Liquidity Constraints," Econometrica, Econometric Society, vol. 59(5), pages 1221-1248, September.
    3. Frank T. Denton & Byron G. Spencer, 1981. "A Macro-Economic Analysis of the Effects of a Public Pension Plan," Canadian Journal of Economics, Canadian Economics Association, vol. 14(4), pages 609-634, November.
    4. Philip Cagan, 1965. "The Effect of Pension Plans on Aggregate Saving: Evidence from a Sample Survey," NBER Books, National Bureau of Economic Research, Inc, number caga65-2, June.
    5. David Laibson, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 443-478.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Social Security System; Pension Funds; India; OECD.;

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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