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Thursday, February 17, 2011

Senior Citizens Demand from Budget 2011: Letter to Finance Minister by All India Senior Citizens’ Confederation [AISCCON]

Hon’ble Shri Pranab Mukherjee,
Union Minister of Finance,
Govt. of India,
134 North Block,
New Delhi – 110001

January 10, 2011
Respected Sir,

Ref : Aspirations of Senior Citizens regarding the National Budget for 2011-12

With hearty Seasons Greetings, the All India Senior Citizens’ Confederation (AISCCON), the largest representative National Organisation of Senior Citizens, wish to place the following aspirations of Senior. Citizens in respect of the ensuing Union Budget. They are today around 9% of the National Population that is more than 10 crore mostly representing the community of Aam Adami.

Sir, our financial problems largely arise because most of us are products of the low cost economy era in our Country when the earnings and hence the savings were meagre compared to present levels. Now even surviving with the dwindling returns on the already meagre savings and galloping inflation has become a challenge. Moreover, most of us suffer with age related health problems and health care has become so costly that we can not afford it. These are two situations on which we have no control. Therefore, to merely survive in the present high cost economy we have to ask for some financial concessions and we earnestly request you to please consider them favourably.

1] The Slow implementation of the National Policy on Older Persons, The National Policy on Older Persons (NPOP) although announced almost 12 years ago has witnessed very slow momentum in respect of implementation of various Welfare Programmes for senior citizens, largely due to lack of specific Budgetory provisions. We request that this aspect may kindly be taken care of in your next budget.

It is also suggested to implement uniform age criteria for definition of Senior. Citizens as 60+ as defined in the National Policy. At present individuals with age 65+ only are considered as Senior Citizens for Financial benefits. This anomaly should be dispensed with and individuals with 60+ age should be considered as eligible for the financial benefits also.

Incidentally it may be pointed out as an example that the Maintenance & Welfare of Parents and Senior Citizens Act 2007 has mandated that an Old Age Home to be provided in each district. Provision should be made for this requirement in the budget. Similarly there are other requirements in existing NPOP such as provision of Multi service Day Care Centres, Health care at affordable costs, Medical vans etc for the implementation of which budgetary provision will be needed.

2] Extremely inadequate Old Age Pension to BPL Senior Citizens. Out of total population of the Elders, two third i.e. about 6.5 crores are below poverty line. Under the present high inflationary pressures with high cost of living their position is literally miserable, unhappy and pitiable since they are being provided a paltry monthly pension of Rs.400-under Indira Gandhi National Old Age Pension Scheme , with which they are finding extremely difficult to meet their basic necessities of livelihood. It is therefore, earnestly requested to make specific provision in your ensuing Budget to raise the said monthly pension to Rs.1000/- minimum with equal contribution by State & Central Administrations to all Senior Citizens belonging to BPL category.. Sir, this expectation is one of the major ones and may be fulfilled with determination at any cost.

3] The plight of Central and State Government and PSU Pensioners The above categories of Pensioners are also badly hit by inflation which has eroded considerably their already inadequate pension. Pension therefore, should be paid net of taxes as recommended by the 5th CPC vide Para 167.11 of their report. Moreover, pensioners are a homogenous class which can not be divided on the basis of their date of retirement and pension is not a bounty. It is a statutory , inalienable, legally enforceable right( S.C.Judgement D.S.Nakara & others vs UOI (AIR 1983, SC 130) & Vth CPC report Para 127.3 to 127.6 .Therefore, the Government is urged to honour the S.C. judgement in letter & spirit to bring all pensioners at par .

4] Specific Saving Scheme for Senior Citizens For financial protection to Elderly Community in this era of Soft Interest Regime, 9% Senior Citizens’ Savings Scheme was introduced in August. 2004 through the Budget announcements. During the intervening periods, there has been huge increase in cost of living with the result that 90% of Sr. Citizens, who, sans pension benefits, have to survive on interest returns on their investments of meagre savings, have been experiencing innumerable difficulties in the maintenance of their livelihood.
Sir, there is an imperative need to extend them adequate financial protection by modifying and enriching the Scheme as 11% Senior. Citizens’ Savings Scheme. We therefore, reiterate that the interest rate of the Scheme should be increased to 11% and it be continued with new arrangements for payment before maturity within one year.

5] Higher rate of interest on Savings Bank Accounts Another measure for financial protection is the enhancement in interest rate of Savings accounts from 3 ½ % (since March 2003) to 4 ½ % p.a. with interest payment on monthly basis on daily products.

6] Higher 2% rate of interest on Term Deposits Although all Banks were advised by R.B.I. in April 2001, to pay half to one percent additional interest on term deposits, no Bank is paying one percent additional interest and trying to comply with R.B.I. directives within the range of half percent additional interest. Infact even 1% higher interest is not adequate to provide the desired protection to Senior Citizens and it is requested that there should be provision of additional 2% interest on their term deposits The benefit of additional interests should be on all types of deposits to fulfill the requirements of financial protection to Senior. Citizens. R.B.I. therefore, needs to be advised suitably through the deliberations of high level body recently established and entitled as Financial Stability and Development Council (FSDC).

7] Issue of Senior Citizens 12% Welfare Bonds. For welfare programme under National Policy on Older Persons, huge amounts would be required To meet the requirements with ease and without constraints, it is suggested that 12% (tax free). Senior Citizens Welfare Bonds should be announced by the Central Govt. This provision will definitely receive strong support from the Elderly Community since it is learnt that the amount over Rs.50,000 crores was mobilized through 9% Sr. Citizens savings Scheme.

8] Increase the Tax exemption limit to 3.0 lakhs At present Income Tax exemption limit for Sr. Citizens (65+) is Rs.2.40 lakhs and under the revised Discussion Paper on DTC it is indicated to be raised to Rs.2.50 lakhs. It is quite likely that you may refer to it in your Budget Speech.
It is therefore, requested to please raise it to Rs. 3.00 lakh for Senior Citizens also giving the same weightage of 25% as is given to normal individuals by raising their limit from 1.60 lakhs to 2.00 Lakhs. It is learnt that even in Pakistan, the income Tax exemption limit for Senior. Citizens is Rs. 4.00 lakhs.

9] Tax deduction at source [TDS] It is a fact that Sr. Citizens are often put to lot of mental stress and confusion as they are required to approach often repeatedly Income Tax offices for refund of tax deducted at source despite their furnishing “H” form to the concerned authorities /Banks who still deduct that through inadvertence and oversight. It is therefore suggested for exclusion of Senior . Citizens Community from purview of TAX Deduction at Source. Under such arrangement, the tax paying Sr. Citizens would obviously include the interest amount in their taxable incomes.

10] Raise Deposit Insurance Credit Guarantee to Rs.3.00 ]akhs It is understood that Deposit Insurance Credit Guarantee Corporation Act is before the Parliament for a long time for amendments and modification. The provision in the Act are pretty old since 1970 or so and the Insurance protection ceiling for Rs. 1.00laks is in vogue since then. It is therefore, long overdue for enhancement and it is suggested that the ceiling be raised to Rs3.00 Lakhs. The mechanism and procedure layout is stretched to a period of 2 to 3 years for payment of insurance settlement of balance amount as eligible in respect of failed financial institutions. For Senior Citizens, such a period is mentally harassing. To save them from such eventualities, it is suggested to provide in the amendments that the affected Sr. Citizens, Orphans, Destitute, Widows etc. would be paid forthwith fifty percent of the balance amount or insurance amount which ever is less without waiting for the procedures or formalities to be fulfilled. Such provisions would ensure due protection to Sr. Citizens and would save them from mental uneasiness and anxieties arising out of inconvenience and fear of saving being blocked in the concerned financial institutions.

11] Special Public Provident Fund Under EEE regime of the proposed Direct Tax Code, the Scheme of Employee Provident Fund, New Pension Scheme and Public Provident Fund etc are included. The prescribed eligible amount for saving tax in PPF is Rs. 70,000/- for investment per year. In two other schemes the eligible amount is Rs1.00 lakh and in those scheme the Senior Citizens can not participate. It is therefore suggested that the eligible amount for saving tax under PPF should also be raised to Rs. 1.00 lakh so that the tax paying Sr. Citizens could concentrate on PPF only. Secondly, the withdrawal amount under PPF is once in a year. Considering the need of Sr. Citizens they may be allowed to withdraw on monthly basis, Thirdly the lock-in period user PPF is 15 years and for Senior Citizens it is suggested to reduce it to 5 Years and after lock in period they should be allowed to withdraw on monthly basis. Fourthly in PPF, interest is paid on yearly basis on 31st March every year. Sr. Citizens holding PPF A/cs may be paid interest on monthly basis on daily products. These relaxations and facilities would render a lot of financial relief to Sr. Citizens. If these suggestions are considered, the individuals with 60+ holding PPF account may be converted in special Public Provident Fund scheme (SPPFS), where above concessions would be available and individual 60+ may be allowed afresh to enter into this scheme.

Sir, we have placed before you in brief our major financial aspirations . Considering the increasing span of life and limited resources at the disposal of Senior.Citizens, we feel confident that as a benevolent progressive economist like you and fulfilling the commitments of Finance Minister of Indian Republic, you will positively consider to translate the above aspirations into reality and get their blessings for accomplishment of your missions.

Sir, it is observed that before the Budget you arrange meetings with different sections of society to hear their views. We shall be thankful if you would consider us similarly so that there would be meaningful interaction to understand one another with relevant perspectives. We ardently look forward to your communication.

With Blessings from Elderly Community and regards

Yours faithfully,

R.N. Mital
All India Senior Citizens’ Confederation [AISCCON]

CC to:
1. Sri Mukul Wasnik, Hon’ble Minister, MOSJE
2. Shri Namo Narain Meena, Hon’ble Minister of State, Ministry of Finance, North Block, New Delhi 110 001;
3. Shri S.S. Palanimanickam, Hon’ble Minister of State, Ministry of Finance, 138 North Block, New Delhi 110 001;
4. Sri Sitaraman, IAS, Secretary, MOSJE
5. Secretary Economic Affairs, Ministry of Finance
6. Shri Milind Deora, M.P., ;
7. Smt. Priya Dutt, M.P., MP
8. Dr. Sanjeev Naik, M.P., Navi MP
9. Sri Anand P. Paranjape, MP
10. Prof. M.S.Swaminathan, M.P.
11. Sri. Srinivas Rao, MP
12. Sri. Vijaya Jawahar Lal, MP
13. Smt. Ratna Bai Tadapatla , MP
14. Sri Pradeep Mathur, MLA, Mathura

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