Event Report

ABOUT THE EVENT

Centre for Public Policy Research (CPPR) organised a panel discussion on “Pension Reform – A Policy Imperative in Kerala”. The session began with Dr Jose Sebastian presenting his paper on ‘Turning Around Kerala Economy and Finances: Pension Reform as a Policy Imperative’. The presentation was followed by a discussion, joined by Dr Martin Patrick and moderated by Anu Anna Jo.

Panellists

Dr Jose Sebastian (Presenter) Senior Fellow (Finance), CPPR

Dr Martin Patrick (Discussant) Senior Fellow (Economy), CPPR

Anu Anna Jo (Moderator) Senior Associate – Research, CPPR

Key Takeaways

  • The Kerala government is facing fiscal stress, with a high percentage of total revenue being allocated to salaries and pensions, indicating the urgent need for reform in the pension system to alleviate this pressure.
  • Restructuring public expenditure, particularly in the pension system, borrowing, and mobilising more resources is crucial to addressing this stress.
  • The current statutory pension system is criticised for being outdated, resembling a form of salary rather than a true pension, and benefiting only a small percentage of the population, causing economic stagnation.
  • Inequality is rising in Kerala, with concerns about the uneven distribution of public resources and the ownership of aided educational institutions, which leads to disproportionate benefits for certain communities.
  • Dr Jose proposes a two-step approach, starting with a Need-based Universal Pension (NUP), where pension amounts are determined based on individual need and income status, followed by a universal pension system with contributions from all working individuals.
  • These reforms could curb migration trends, retain the young workforce, promote economic growth, and serve as a model for other states.
  • Dr Martin Patrick proposed a quasi-universal basic pension instead. He emphasised the need to focus on improving the productivity of the workforce and revamping the productive sectors of the economy.

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