Letters: Make policy future-proof

With reference to the article, "Why financial schemes are struggling" (November 30), I fully agree with the view expressed by its author, Debashis Basu, that there is fallacy in the schemes announced by the government. A universal pension plan for every individual in the country in the age group of 18 to 60 was launched by the government. A person in that age group has to pay a monthly amount till he attains the age of 60 after which he receives a monthly pension amount. On the face of it, the scheme is good, but deeper analysis shows all is not well.

The first and foremost point is that the amount accumulated till an employee's retirement might be too little and would likely be of little value to him or her.

The second question is how the government plans to deploy the funds collected under the scheme. Will a separate corpus be created from this fund for payment of pension and will it be invested in the market to yield sufficient returns? How can a person be sure that he will get the monthly pension after attaining the age of 60? Isn't this too long a period?

In this context, it is worthwhile to recollect that similar schemes had been launched by some public sector organisations and subsequently withdrawn. I refer here to the Rajalakshmi scheme for girl students floated by UTI, the Deep Discount Bonds issued by IDBI Bank and the Perennial Pension Plan introduced by State Bank of India. Who can predict financial conditions 40 years down the line while making a commitment now? What stand will the government of the day after 40 years take on the matter?

The economists of our country, including the Reserve Bank of India governor, should consider the above issues and advise the government and the public suitably.

B C U Nair, Alappuzha

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