Senior citizens have never been protected by the Government as a class in India. Except for a few concessions given as welfare measures like concession in Rail tickets, concession bus tickets in certain states, separate counters for senior citizens in government, railway and bank offices, no other serious support has ever come from the Government.
When inflation control was not seen as a Government goal in earlier decades, the interest rates were higher on deposits and senior retired middle class were enjoying good rates of interest on their deposits with banks and competitively with companies.
In the Indian economy, like Japan’s economy, most of financial savings came from small workers and wage earners who saved around 30% plus of their earnings in banks.
Corporates did not depend on banks for loans as the Debentures and Bonds were very popular and long-term lending institutions like IDBI, ICICI, IFCI, SFCI were funding them for industrialization.
When the new industrial economies like Brazil, South Korea, Taiwan, HongKong and China brought new economic policies in their country, the metals, heavy industrial machinery, project constructions, shipbuilding etc were taken up by these countries very efficiently.
As a result, major products of Indian industry failed in the international market, the oil crisis of over 2 decades and political wars decimated the strengths in the economy.
All term lenders failed en masse, and were converted as banks that especially deal with short term money sourcing and deployment.
With long term finance dried up due to the failure of ICICI, IDBI,IFCI etc, corporates started to depend on bank finance for their business needs and thus in order to keep rates attractive for corporates to borrow from the banking system, India adopted the latest international economic idea of containing the inflation by controlling the nominal interest rates in the economy.
This spelt doom for many of senior citizens who found that the monthly income from deposits have drastically reduced to around 50% in the first decade of our country’s adoption of this monetary policy.
Now the entire economic thinking of the nation is for making rates still lower, thus the original suppliers of money to the banking sector are put to tremendous loss as the rate of interest for their long term savings is pathetic.
The face of banking has undergone a metamorphosis in the last three decades.
Previously when we joined service, banks were having RDs and Cumulative Deposits and Interest drawing Fixed deposits of even up to 25 years. Any finance man will agree that the cumulative interest for such long terms were the best investment with no risk at all.
The riskfree ROI in India is now just 3% per annum. Though the banks allow deposits for terms upto 10 years, the rate structure is skewed, allowing highest rate for one year deposits. The average maturity period of current period deposit with banks is just 1.3 years.
Thus the senior people who toiled and saved money were punished by the economic policies.
The industrial borrowers who should not have been permitted to borrow from banks have failed all the banks, such that just two banks in the public sector are able to show profitable performance with over 11 big PSBs stopped by RBI from further lendings.
If the original economists of the country could have prevented the monetary economists in India from gaining supremacy in economic policy, we would not be at a mess as we are in now.
There is no demand for high cost deposits in any sector of the economy and thus no government can hope to artificially create such a scheme and compel the budget to foot the cost of interest on such deposits.
There is no chance in the direction of our economy for any concessionary higher rate of interest or any other benefit to the seniors.
The present government has indeed introduced such schemes but it is not viable for any government to extend them.
Corporates have failed the economy and they are the culprits. None of the promoters of the corporates is poorer after he took finance from banks but the entire banking sector is in danger.
It is a very serious crisis and nobody realises the gravity of the situation. Economic failure of a nation as big as India will lead to very serious repercussions, ultimately leading to unrest and civil disturbance and even the unity as a single nation may be hard to defend.
Fortunately or unfortunately I do not any money left anywhere including banks, stock and with companies and as my savings and investment is nil, I am the least affected in this regard.
The medical insurance policies of all insurance companies are bound to increase as the claim amount is always more that 100% to 200% of the annual premium income in the past 4 years and they thus go on increasing the premium.
The welfare aspect of any economic action can not at all be taken care of by any company or bank, unless and until the government brings up sufficient measures to protect the masses.
In India the populace is divided into 3 classes: (1) those with family income of Rs.6000 per month, making them eligible for government’s welfare measures; (3) The third group is the rich and super rich which includes all classes of industrialists, politicians at all levels, and top earning professionals, and thugs, criminals and rowdies who become crotepatis within 5 years. *These set of people unfortunately decide the nation’s policies.*
(2) The second group is people in the middle class, who earn more than the economic minimum of Rs.6000 per month and thus are not eligible for any welfare support. This is the majority, comprising around 60% of our population.
Hence in the decades to come, it will be only us, the middle class, who will continue to feel the pinch, without fail.
*Typed in anguish and with anger in mind as a response to a senior citizen’s lament that medical insurance premiums are disproportionately increased in India*