Retirement age set to rise due to higher life expectancy: Eco Survey

New Delhi: Rise in retirement age for most of India's working population from 60 years at present seems inevitable due to increase in life expectancy, according to the Economic Survey.

India's population is expected to grow under 0.5 per cent during 2031-41 due to decline in fertility rate and increase in life expectancy, according to the survey.

"Since an increase in the retirement age is perhaps inevitable, it may be worthwhile signalling this change well in advance perhaps a decade before the anticipated shift so that the workforce can be prepared for it," the Economic Survey for 2018-19, tabled in Parliament by Finance Minister Nirmala Sitharaman Thursday, said.

The survey pointed out that this will also help plan in advance for pensions and other retirement provisions.

Given that life expectancy for both males and females in India is likely to continue rising, increasing the retirement age for both men and women going forward could be considered in line with the experience of other countries, it added.

Due to ageing population and increasing pressure on pension funding, many countries have begun raising the pensionable retirement age.

The economic survey said demographic projections show that India's population growth will continue to decline over the next two decades, growing less than 1 per cent during 2021-31 and under 0.5 per cent during 2031-41.

"Such population growth rates would be close to the trend currently seen in countries such as Germany and France. In fact, with total fertility rates (TFR) projected to fall well below replacement level fertility by 2021, positive population growth in the next two decades will be due to population momentum and the continued rise in life expectancy," it added.

At present, TFR of 2.1 children per woman is called the replacement level fertility, which is the average number of children a woman would need to have in order for the population to replace itself.

TFR is now below replacement level fertility in 13 out of the 22 major states.

In fact, TFR has reached as low as 1.6-1.7 in states such as Delhi, West Bengal, Tamil Nadu, Andhra Pradesh, Telangana, Punjab and Himachal Pradesh, it added.

It also remarked that even high fertility states such as Bihar, Jharkhand, Rajasthan, Madhya Pradesh, Chhattisgarh, Uttar Pradesh and Uttarakhand have seen a sharp decline in TFR over the years.

The survey pointed out that with TFR reaching low levels and longevity continuing to increase, India's population at the national level and in several states will begin ageing significantly in just a decade from now.