Study Urges Kerala to Adopt Inclusive, Sustainable Pension Reforms

Quick summary

• Kerala faces critical challenges due to a rising pension burden and an ageing population, as noted in the paper Public pensions in an ageing state: Is sustainability at risk? by researchers from the Gulati Institute of Finance and Taxation (GIFT).
• The state’s pension expenditure was 17.3% of total revenue for 2023-24, with slight fluctuations projected for subsequent years.
• Approximately 60 lakh beneficiaries currently receive monthly pensions of ₹1,600 under social security and welfare funds.
• Kerala’s elderly population is expected to rise sharply to nearly 24% by 2031, up from previous levels cited in Census 2011 and reports on population projections.
• The GIFT researchers propose better targeting of beneficiaries, integration of contributory schemes with welfare models, improved delivery systems, and robust revenue mobilization as key reforms to address fiscal strain while maintaining inclusivity.

Indian Opinion Analysis
Kerala’s inclusive approach towards pensions underscores its commitment to social equity but highlights pressing concerns over long-term fiscal sustainability. With nearly one-fifth of its revenue already allocated to pensions alongside rapid demographic shifts towards an ageing society, Kerala exemplifies the dilemma faced by states balancing welfare goals against financial constraints. Suggested measures such as better beneficiary targeting and scheme integration are practical avenues that could enhance efficiency without diluting social protections. However, implementing these solutions effectively against political resistance or administrative hurdles remains a major challenge.For India as a whole, Kerala serves as a case study for managing rising pension liabilities in regions with similar demographic patterns-reinforcing the importance of concurrent policy innovation across multiple fronts before larger systemic strains emerge nationally.

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