Government reduces age bar for elderly allowance, adds liability to coffer
Published On : 25 January, 2018 3:17 am
The government on Wednesday decided to reduce the age bar for an elderly allowance from 70 to 65.
The decision of the Cabinet meeting on Wednesday is going to add Rs 7 billion liability to the government’s coffer. The current expense for this allowance is Rs 31 billion.
Social benefits and support from government are welcome move but, we advise the government to put serious thought on how to manage financial resources for such commitments, said a former banker Anal Raj Bhattarai.
Asking how will the Nepali economy sustain the burden, he said that currently about 5 percent of the population — about 1 million — is estimated to be more than 65 years old and 61 percent of the population is between 15 to 65 years old. “We expect within next two decades the population of Nepal will grow considerably grayer,” he said, adding that by 2040 additional 25 percent of the population will reach the age of 65. “That translates, 6.5 million people eligible for getting old age perk by 2040, resulting to an additional financial burden around Rs 200 billion per annum. The increased cost of old age benefits will put enormous pressure on government budgets.”
If the government fails to create new sources of revenue, Nepal will be in debts trap, he added. “Nepal needs to improve all sectors of the economy to mitigate financial risk.”
We think high growth from agricultural, harvesting natural resources and tourism should be a major focus of Nepal, Bhattarai added.
Likewise, the government also decided to increase the deadline by 6 months and hike housing reconstruction grants to be provided to earthquake victims to Rs 400,000 from Rs 300,000.
The Cabinet meeting held at Baluwatar decided to increase the housing grants by Rs 100,000 from Rs 300,000 for quake victims whose houses were damaged by the devastating 2015 earthquakes, according to Minister for Commerce Meen Bahadur Bishwakarma.
Earlier Puspa Kamal Dahal Led government had also increased grant to Rs 300,000 from Rs 200,000. This is the second time the housing grant for quake victims has been increased.