.....The connection between bank deposits on which most senior citizens depend exclusively for their livelihood and gold investments may seem far-fetched. After all, senior citizens can hardly be expected to hold or buy gold to hedge against inflation. Even the gold-backed deposit schemes, which are likely to be introduced, will hold no specific attraction to the pensioners and others solely dependent on interest from bank deposits. Yet, tackling this very basic need of senior citizens — to have schemes that are hassle free and protect them from inflation — is on a par with efforts to wean away gold demand. Unless a scheme is created that will effectively and consistently be able to beat inflation and equally importantly convince ordinary citizens that it will be able to do so over time, it has no chance of succeeding in the race against gold. The senior citizens as a class may not patronise gold but certainly have a stake in any policy measure that will give them an opportunity to keep their head above water...........
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1 comment:
The article has focus on an issue, the plight of senior citizens depending on the return on their savings, generally ignored by planners and policy makers. The plight of those who retired in the 1990’s and had anticipated a return of 12 per cent per annum on their retirement savings should be a case study for present government which is pushing a New Pension System (NPS) and for the expert Investment Advisors of today. Those retirees are faced with a one third reduction in the real income and manifold increase in household expenditure and expenses on healthcare. Government pleads helplessness in their case.
Taking a cue from the above experience, the wage earners of today should start saving much more than what the government tells them to save (10% of wages with equal contribution from employer under NPS). This will mean demand for higher wages and pave the way for transfer of resources from rich to the poor.
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