Reviewed Study on Indian Pension Reform and Indian Pension Reform

I. INTRODUCTION

The Constitution of India is the apex law of the country. It is the base of the entire judicial system and governments of the country. It helps to design the framework of power and political principles. It develops the constitutional supremacy, not parliamentary supremacy as it is not a product of parliamentary mechanism but by the constitution assembly and adopted by its members through a declaration as depicted in the preamble of the constitution. Parliament cannot override any part of it; as such the Constitution of India is the ultimate authority for ruling this country. The relationship between employer and employees or the owner and laborers need to be defined clearly. It is a prime concern in all developed and developing countries of the world including India. In this country, the origination of the relationship could be traced around 400BC. During the post-independence era, especially after the creation and implementation of the Constitution, India experienced a radical change in the business world. People of India become a part of the industrial revolution. Naturally, the importance of employer-employee enhanced with time. Welfare is deemed as the relative concept since it is linked with time and space. Its changes lay an effect on the system. Owing to the above, welfare content's potential changes also alter with space and tim. Further, they have observed that welfare in terms of the concept is seen to differ countrywide and between places. Welfare as the terms aids ideas, stating the well-being, happiness, good health, prosperity and human resources development. The welfare concept is the total concept consisting of mental, physical, emotional, and moral well-being of the person. The welfare social concept states the man's welfare, his community and family. It is the three aspect interconnection in the sense where they work together and then supplement individually on one another. Next, welfare is the concept positive, leads to establishment of the minimal living of standard, as it would require small condition acceptable of the prevalence in social and biological area. So, at the time of defining the above, it is important for the welfare components to be taken care. (Food, health, clothing, medical assistance, housing, insurance, etc.) Labour government, by employers, or by agencies beyond one that is said by law or one being expected normally as the sunset of contractual benefits that account for bargaining of the workers‖. A second definition on the labour welfare suggest that ― these kind of facilities, services, and amenities like rest, adequate canteens, recreation facilities, medical and sanitary facilities, arrangements of travel for work and the workers accommodation employed at a particular distance from security measures, and contributed to the betterment of the conditions were employed workers work. Funds of Retirement are the funds which get accumulated across the individual's working life for the payout as the proposed benefit at the time of retirement or superannuating. The above amount is the income source regular that would look after them for the entire life. As this find as per its nature is part of an income for the living of the individual after retirement , the problems of sustainability and a living standard maintained after retirement is a major concerns for all. The conducted current has been done to find whether the given institutions are organized so as to manage and also fulfill the fiduciary responsibilities. Funds of Retirement are the institutional funds since they get accumulated for the total individual benefit for the people groups which is then managed at their level. These funds are important since they add more teeth to the funds and at time of them being managed by the group. They above also suggest this might affect the market financially by the size. On managing the funds by groups, they attain self-benefit and also perils. The importance of the consistent performance and also the management of people's performance, delivery and management, are vital aspects of the successful structure; which is also true for the retirement funds. In the same way, the discipline importance in the said needs of structure should be inculcated with the ideal of the needs of fiduciary responsibilities to seep in. The major challenge is with the funds that are privately managed since they undergo tremendous pressure owing to factors like rising expectations and dropping of the Indian rate of mortality. And this leads to the comparison with their counterparts in different nations.

As depicted by Sen (2015) the idea of job or employment must be associated with the idea of work-value55. This value may differ on the basis of the people who evaluate the job or work. This value is an essential part because no physical activity can define employment as such. The valuation is important when it comes to the perspective of estimation or evaluation. Prof. Sen explains three

55 Sen, Employment Technology and Development, (Oxford University Press, Indian Edition, 2015).

self-esteem or respect from others. The second or product aspect is the result of action while the income elaborates the payment or remuneration. As depicted by Sen (2015) the idea of job or employment must be associated with the idea of work-value. This value may differ on the basis of the people who evaluate the job or work. This value is an essential part because no physical activity can define employment as such56. The valuation is important when it comes to the perspective of estimation or evaluation. Prof. Sen explains three factors of employment, income, product and recognition. As far as the recognition aspect is concerned, employment might be a part or way of self-esteem or respect from others. The second or product aspect is the result of action while the income elaborates the payment or remuneration. Mathur (2018) elaborates the issue of job, equity as well as development alongside their interconnection in the Indian field. A comprehensive survey on the job or employment aspect is conducted in India57. There are three issues which are mentioned in the analysis, namely: open unemployment, semi-open unemployment and non-employment from the general NSS ideas. The researcher investigates the excessively high intrinsic labour absorptive capability of the primary sector. The self-employment elasticity was 0.45 with respect to the productivity expense for each worker. This elasticity is the lowest in the primary sector. While describing the regional case, the three most high aggregate employment elasticity take place in Andhra Pradesh, Orissa and Himachal Pradesh respectively whereas Punjab, Kerala and Tamil Nadu marks the lowest employment elasticity. As indicated by Ray (2018) development in the organized sector is not sufficient to retain the jobless work force58. So the primary accentuation is employment age was on the advancement of the unorganized sector of the economy, where advancement of independent work and the improvement of little scale enterprises were given more prominent significance. In a creating nation, where countless people are beneath the neediness line, the work force can't stand to stay inactive in light of the fact that they need to endure. So they are constrained to do some work notwithstanding for inadequately paid occupations. These people are considered as utilized in labor force studies. Methodologies embraced in labor force studies are

56 Sen, Employment Technology and Development, (Oxford University Press, Indian Edition, 2015). 57 Mathur, Employment, equity and growth, (Indian Journal of Labour Economics, volume 41, No.1, 2018). 58 P.K. Ray, Employment, unemployment and underemployment: An Analysis, (The Indian Journal of Labour Economics, Volume 41, No.12, 2018).

overviews will in general overestimate employment, disparage work force and in this way belittle unemployment and underemployment, the insights of employment trades don't cover the whole populace.

Banu and Ashifa (2011) conducted research study on ―labour welfare measures in Public Sector Transport Corporation‖ that throws light on welfare measures followed in Public Sector Transport Corporation59. This study analyses the various dimensions of labour welfare measures that are perceived to the labors. The researcher tried to find out how the existing welfare measures cater the needs of employees of Public Sector Transport Corporation .Stratified random sampling method was used and 20 employees have been taken from 5 departments ,Operation Department, Personnel Department, Material Department, Industrial Relations Department and in Technical Section. He found in his research that under working experience, majority of the respondents had 11 to 15 years of experience. Public Sector Transport Corporation, majority of the respondents belong to neutral level and some of them were highly satisfied. Majority of the respondents were satisfied with working environment. Majority of the respondents were dissatisfied with the service provided in the canteen. The respondents were dissatisfied with the night duty and the rest room facilities. 89% of the respondents said that workload is very high.65% of the respondents said that the leave facility is at moderate level. It has been observed that 46% of the respondents were highly satisfied with the job 43% of the respondents were satisfied with their job and 11% of them were at neutral level. Finally he concluded through the research that the Government should take a keen interest to fill up the vacancies to share the work among them as the employees felt that the workload is very high. Some of the welfare measures like housing facilities; loan facilities, Rest Room facility, Housing Facilities and Gratuity should be incorporated along with welfare measures in order to satisfy employees and so the job performance can be improved. The corporation should take necessary steps to improve these measures. By doing this the employee can do their job more effectively and efficiently. Mishra (2011) conducted research study on ―effect of welfare measures on employee‖. This project aims at studying and analyzing the safety and welfare

59 V. Banu and M. J. Ashifa, articles published on a study on labour welfare measures in Public Sector Transport Corporation. (Ref. IJBEMR Volume 2, Issue 2 (2011) ISSN 2229-4848.Page no.129-140 Sri Krishna international research & educational consortium, 2011).

about the work environment .He concluded that most of the employees in the company are female. More than 50% of respondent are working for more than 10 years. Sample size was 50 respondents. Respondents are highly satisfied with the medical facility. Most of employees were dissatisfied with the safety measure and only few are satisfied. Employees were satisfied with the working condition. Respondents were satisfied with the motivation given by the company and the relation between supervisor and workers. Respondents are satisfied with the canteen facility, credit facility and working condition. The communication in work place has no effect on work satisfaction. The increase in employee motivation will increase the work satisfaction. The effect of welfare measures is about 25% on employee morale. The study on effect of welfare measure on employee morale helps the management to know the satisfaction level of the employees about the welfare measure provided by the company. From this study we can infer that the majority of the employees are satisfied with the welfare measures. The company can concentrate on other facility like crèche facility, uniform, and safety measures to boost the employee morale. The employee morale is good in the company. It is found that the effect of welfare measure on employee morale in this study is about 25%. Rani (2013) conducted research on ―Employees Welfare Measures in Select Public Enterprises In Andhra Pradesh‖ observed that welfare measures existing in the two enterprises and their impact on industrial relations and impact of welfare measures on the productivity of SLPE‘s under study61. Keeping the broad assumption that make the welfare measures better are the productivity levels of personnel concluded in research that APSRTC is providing good medical facilities as compared to A.P.D.D.C.F. Ltd With regard to housing facilities in APSRTC, workers revealed that the procedures prescribed for the allotment of houses are sometimes violated by the management. At the same time, in the A.P.D.D.C.F. Ltd., it is revealed that the percentage of housing satisfaction has been declining from year to year. Regarding the social security measures, it is found that the corporation is implementing provident fund, family pension and gratuity schemes for its employees. In addition, the management is also following a policy of providing employment to the dependents of the deceased workers. At the same time A.P.D.D.C.F .Ltd. it is found that the federation is implementing

60 A. Mishra, Research on a study on “effect of welfare measures on employee (2011). 61 S. S. Rani, Research on “Employees Welfare Measures In Select Public Enterprises In Andhra Pradesh”, (Submitted to the Department of Business Management, Supervisors: Prof. A V Satyanarayana Rao, Business Management, Prof. R K Mishra, IPE, Hyderabad, 1993. (2013).

happier than A.P.D.D.C.F. Ltd.

Gulati (2010) made a study about the working of Agricultural workers pension scheme and its impact on agricultural workers62. The study shows that due to increased life expectancy of the people, the state has to support to a sizeable portion of old population. The study also found that the scheme covers only 9 per cent of the eligible agricultural workers. Herald (2014) alleged that the government had neglected the construction workers while framing policies and urged the government to formulate policies to uplift the conditions of the workers. Indo-Asian News Service (2004) reported the demand of various trade union leaders for hike in pension and other benefits given by the Tamil Nadu Construction Workers Welfare Board (TNCWWB)63. John (2014) through a Socio-psychological analysis of the pensioners of the KBOCWWFB showed that the breakdown of the joint family system and the emergence of the nuclear family system create socio-psychological tensions in the lives of the elderly population. Personal and family liabilities compel a good proposition of the elderly construction workers to engage in some kind of economic activities. Programmes will have to be developed to promote family values and invigilate the young generation on the necessity and desirability of inter-generational bonding and continuity. He offers some comments and suggestions to improve the welfare of the construction workers and the activities of KBOCWWFB64. Nair (2017) by making a sociological analysis of the problems and needs of old women agricultural workers found out the extent of social support and social security available to them65. The study finds that erosion of traditional values consequent on the modernization and broken down joint family system increased the miserable conditions of old workers working in the unorganized sector, especially in agriculture. But the appreciable step taken by the Government of Kerala, instituting a series of pension schemes, for the rescue of these old people is remarkable

62 S. Gulati, Agricultural Workers Pension Scheme in Kerala-An experience in Social Assistance. (Economic and Political Weekly, 339- 343. 2010). 63 Chintamani, Government has neglected construction workers. (Bangalore: Deccan Herald News Service. 2014). 64 P. John, Social Security and Labour Welfare with Special Reference to Construction Workers in Kerala. (Discussion paper 65, Kerala Research Programme on Local Level development, Centre for Development Studies, Thiruvananthapuram. 2014). 65 S. B. Nair, Social Security and the Weaker Sections. (Ph.D. Thesis, University of Kerala, Thiruvananthapuram, 2017).

stated that in Latin America, pension reform and privatization have delivered benefits, shrinking deficits and greater transparency, but systems need to boost their returns and attract more workers66. As part of wider efforts at social security reform over the past 25 years, most governments in Latin America have endeavored to reduce the financial burden of paying pensions. The measures have been closely watched in the developed world, where aging populations are straining publicly funded pension systems. The most urgent challenge is to increase replacement rates. Innovative strategies to attract unaffiliated people are needed to bring the system‘s benefits to a larger share of the population. Gottschalk (2007) in his paper titled ―Back to the Future? Health Benefits, Organized Labour, and Universal Health Care‖ states that the umbrella of employment based health benefits is growing increasingly threadbare67. As a result, health benefits are once again a major arena of labour-management strife, and once again calls for universal health care by many labour leaders mask important differences between them over health care reform. Some labour leaders advocate a bottom-up mobilization in support of a single-payer solution that would dismantle the system of job based benefits rooted in private insurance. Others stake their health care strategy on wooing key business leaders to be constructive partners in some kind of unspecified comprehensive reform of the health system. Organized labour faces enormous obstacles, both institutional and ideological, to forging an effective united front to fight for comprehensive, high quality, affordable health care for all. Two entrenched features of the shadow welfare state of job based benefits, notably the Employee Retirement Income Security Act (ERISA) of 1974 and the union run health and welfare funds created under the Taft Hartley Act, remain daunting barriers on the road to reform, exacerbating tensions and differences within organized labour. Moreover, a dramatic ideological schism in the labour movement about its future direction vexes its stance on health care reform. These ideological differences fuel vastly different views within organized labour about how best to confront the unraveling of job based health benefits and the growing popularity among business leaders, insurers, and public officials of the ―individual mandate‖ solution, which would penalize people who do not have adequate health insurance.

66 J. R. Brown, M. J. Warshawsky, "Longevity-insured retirement distributions from pension plans: market and regulatory issues. (NBER Working Paper 8064, 2011). 67 M. Gottschalk, Back to the Future? Health Benefits, Organized Labour and Universal Health Care, (Journal of Health Politics, Policy and Law, Vol.32, No.6, p.923. 2007).

employment based health benefits is growing increasingly threadbare. As a result, health benefits are once again a major arena of labour-management strife, and once again calls for universal health care by many labour leaders mask important differences between them over health care reform. Some labour leaders advocate a bottom-up mobilization in support of a single-payer solution that would dismantle the system of job based benefits rooted in private insurance. Others stake their health care strategy on wooing key business leaders to be constructive partners in some kind of unspecified comprehensive reform of the health system68. Organized labour faces enormous obstacles, both institutional and ideological, to forging an effective united front to fight for comprehensive, high quality, affordable health care for all. Two entrenched features of the shadow welfare state of job based benefits, notably the Employee Retirement Income Security Act (ERISA) of 1974 and the union run health and welfare funds created under the Taft Hartley Act, remain daunting barriers on the road to reform, exacerbating tensions and differences within organized labour. Moreover, a dramatic ideological schism in the labour movement about its future direction vexes its stance on health care reform. These ideological differences fuel vastly different views within organized labour about how best to confront the unraveling of job based health benefits and the growing popularity among business leaders, insurers, and public officials of the ―individual mandate‖ solution, which would penalize people who do not have adequate health insurance. Chintamani (2014) present an empirical analysis of how Sweden‘s public old age pension system affects the retirement decision. They focus on male blue-collar workers whose dominant income source as retired comes from the public old age pension system. They have developed a dynamic programming model using the rules for the public pension system. In addition to the effects of economic incentives through the pension systems, the model measures the effect of the mandatory retirement age of 65, which applies to most parts of Sweden‘s labour market, on retirement behavior. The estimated model fits within sample retirement patterns remarkably well. A simulation of a hypothetical reform, where all retirement incentives in the pension schemes are delayed by three years, shows that economic incentives affect retirement behavior69.

68 M. Gottschalk, Back to the Future? Health Benefits, Organized Labour and Universal Health Care, (Journal of Health Politics, Policy and Law, Vol.32, No.6, p.923. 2007). 69 Chintamani, Government has neglected construction workers. (Bangalore: Deccan Herald News Service. 2014).

Monga (2010) conducted a study on implementation and awareness of labour laws in Haryana. He focused mainly on the machinery for implementation of labour laws and the impediments confronting the implementation. He has found that the staff deployed for enforcement of labour laws are inadequate, inspections are not frequent, the status of supervision of returns under various laws reveals a dolesome picture, procedures are frivolous and vexatious, penalties imposed for offending legislation in the state are fine and the penalty of imprisonment is rarely imposed. He concludes that the absence of adequate awareness about the laws is the major factor for inadequate enforcement of law70. In the drawdown of retirement savings, the interests of the various stakeholders are not necessarily in parallel. For instance, in countries where income-tested social transfers for seniors are significant, it could be in the best interest of low-income retirees to draw down their wealth during the earlier years of retirement when they are better able to enjoy it, and benefit from greater transfers thereafter. On the other hand, a rise in poverty rates and financial pressure on income-tested social programs would lead to changes in intergenerational transfers within the economy and affect the financial welfare of the following generation Brown and Warshawsky, (2011). This paper considers the perspectives, and potentially conflicting objectives, of the various major stakeholders affected by strategies, including the retiring individuals, family, heirs, the financial industry, and the government sector71. Bhatnagar (2015) in his study on ―Labour Welfare and Social Security Legislation in India‖ evaluated the effectiveness of the Employees State Insurance Scheme. He has found that the employees are uncomfortable on the issue of their contribution towards the scheme. Majority of the employees are not fully aware of different benefit schemes as admissible under the Act. Medical certificates are easily available to the insured persons. He suggests that steps should be taken to curb this tendency of tax certification72. Bhatnagar (2015) in his study on ―Labour Welfare and Social Security Legislation in India‖ evaluated the effectiveness of the Employees State Insurance Scheme. He has found that the employees are uncomfortable on the issue of their contribution

70 M. L. Monga, Implementation and Awareness of Labour Laws in Haryana, (Unpublished Ph.D. Thesis Submitted to Punjabi University, Patiala, 2010). 71 J. R. Brown and M. J. Warshawsky, Longevity-insured retirement distributions from pension plans: market and regulatory issues. (NBER Working Paper 8064, 2011.) 72 Bhatnagar, Labour Welfare and Social Security Legislation in India, (New Delhi, Deep and Deep Publications, 2015).

easily available to the insured persons. He suggests that steps should be taken to curb this tendency of tax certification73.

The Constitution of India provides every individual the right to life with liberty and self-dignity. A combination of all three can be termed as the main pillars in production of a developed human being. For living an individual need food, clothing and shelter, for acquiring all these he needs the liberty to earn, while earning his status he also need to maintain his dignity whether moral, social or legal. All over his life he work to earn the fruits which will then help him in his bed time means, at age of retirement when he is not able to work more as he used to. Therefore, Retirement benefits are the accumulated savings of a lifetime of service. The pension or the retrial benefits may be the only source of livelihood and means of survival at old age; hence non-payment of these benefits may have devastating effects on their lives. Since it is the question of the very survival of the retired employee or next of - kin, and / or family members of the deceased employees, if these retirement benefits are not paid to them, it violates their human rights too.

1. Sen (2015). Employment Technology and Development, (Oxford University Press, Indian Edition). 2. Sen (2015). Employment Technology and Development, (Oxford University Press, Indian Edition). 3. Mathur (2018). Employment, equity and growth, (Indian Journal of Labour Economics, volume 41, No.1). 4. P. K. Ray (2018). Employment, unemployment and underemployment: An Analysis, (The Indian Journal of Labour Economics, Volume 41, No.12). 5. V. Banu and M. J. Ashifa (2011). Articles published on a study on labour welfare measures in Public Sector Transport Corporation. (Ref. IJBEMR Volume 2, Issue 2 (2011) ISSN 2229-4848.Page no.129-140 Sri Krishna international research & educational consortium, 2011). 6. A. Mishra (2011). Research on a study on “effect of welfare measures on employee.

73 Bhatnagar, Labour Welfare and Social Security Legislation in India, (New Delhi, Deep and Deep Publications, 2015).

to the Department of Business Management, Supervisors: Prof. A V Satyanarayana Rao, Business Management, Prof. R K Mishra, IPE, Hyderabad, 1993. 8. S. Gulati (2010). Agricultural Workers Pension Scheme in Kerala-An experience in Social Assistance. (Economic and Political Weekly, pp. 339-343. 9. Chintamani (2014). Government has neglected construction workers. (Bangalore: Deccan Herald News Service). 10. P. John (2014). Social Security and Labour Welfare with Special Reference to Construction Workers in Kerala. (Discussion paper 65, Kerala Research Programme on Local Level development, Centre for Development Studies, Thiruvananthapuram). 11. S. B. Nair (2017). Social Security and the Weaker Sections. (Ph.D. Thesis, University of Kerala, Thiruvananthapuram). 12. J. R. Brown, M. J. Warshawsky (2011). "Longevity-insured retirement distributions from pension plans: market and regulatory issues. (NBER Working Paper 8064). 13. M. Gottschalk (2007). Back to the Future? Health Benefits, Organized Labour and Universal Health Care, (Journal of Health Politics, Policy and Law, Vol.32, No.6, p.923). 14. M. Gottschalk (2007). Back to the Future? Health Benefits, Organized Labour and Universal Health Care, (Journal of Health Politics, Policy and Law, Vol.32, No.6, p.923). 15. Government of Canada (2010). “Canadians and Their Money: Building a brighter financial future.” (Task Force on Financial Literacy). 16. M. L. Monga (2010). Implementation and Awareness of Labour Laws in Haryana, (Unpublished Ph.D. Thesis Submitted to Punjabi University, Patiala). 17. J. R. Brown and M. J. Warshawsky (2011). Longevity-insured retirement distributions from pension plans: market and regulatory issues. (NBER Working Paper 8064)

19. Bhatnagar (2015). Labour Welfare and Social Security Legislation in India, (New Delhi, Deep and Deep Publications).

Research Scholar, Faculty of Law, Aligarh Muslim University, Aligarh (UP) manav.humanity@gmail.com