February 28, 2009

Assessment of Impact of Economic Slowdown on Older Persons of India

A Study conducted by Agewell Foundation


INTRODUCTION

During the year 2008 Indian economy had to suffer a lot due to global economic downturn. Almost every sector of the economy had shown negatives trends throughout the year. Investors, especially retired older persons were the worst affected sections of the society as they forced to loose big chunk of their hard earned money. On the other hand rising prices had only worsened the situation.

0BJECTIVES

The broad objective of the study was to assess the impact of economic slowdown on older persons in recent times. Secondly, whether they have taken actions in response to the changing economy, and if they felt enough was being done to address economic problems.

METHODOLOGY AND SAMPLE DESIGN

For this study Agewell Foundation carried out a nationwide survey to study the impact of the economic slowdown on older persons in India. For this study direct depth interview was conducted by administering semi-structured schedules to collect information related to issues affecting them due to recession of Indian economy in recent times.

For the survey a national representative sample of 1500 older persons was interviewed across the country.


Sample Units

The sample units were selected base on purposive random sampling but taken care to incorporate the representative views of the country from five divisions.

S. No

Type of sample

State

No of sample districts

No of sample blocks*

No of respondents


Region 1 – North India




1

Uttar Pradesh, Haryana, Punjab, Himachal Pradesh, Uttarakhan, Delhi, Chandigarh, J&K

10

20

300


Region 2 – South India




2

Andra Pradesh Tamilnadu Kerala Karnataka, Pondicherry

10

20

300


Region 3 – East India




3

West Bengal, Orissa, Assam, Tripura, Meghalaya

Mizoram, Arunachal Pradesh, Sikkim, Nagaland, Manipur

10

20

300


Region 4 – West India




4

Rajasthan, Maharashtra, Gujrat, Goa

10

20

300


Region 5 – Central India




5

Madhya Pradesh, Bihar

Jharkhand, Chhattisgarh,

10

20

300


All India Total

50

100

1500

*The total of 2 blocks selected from each district for the study was such that one from a block head quarter and the other from far off from the headquarters.

Sample Respondents

The populace of 55+ years was randomly selected from the strata of three age groups:

· Strata 1 – 55-60 years,

· Strata 2 - 61-65 years; and

· Strata 3 - 66-70 years

A total of 500 respondents were selected from each age group. In each age group the target was to include every sections of the society, specifically –

· Retired older persons

· Businessmen

· Non-pensioners

Agewell Foundation also took care to include representative sample size of both men and women from both urban and rural areas as mention above under sample units.

About 100 volunteers from its volunteers' network spread across the country were selected to work as interviewers for the survey. The interviews were conducted during the month of December 2008.

MAJOR FINDINGS

Study shows that a majority of respondents believe the economy is really suffering and that many of them are finding it very hard to address their needs, even their daily life has also been affected severely due to their day-to-day decreasing income.


· 86% of all respondents (88%, 86% and 84% respondents in age-groups of 55-60 years, 61-65 years and 66-70 years respectively) say the economy is in very bad condition and getting worse. But large numbers of elder people have started making radical changes such as getting gainful occupational engagements, reducing their expenses on recreational facilities and luxuries.


· Over 30% of all respondents, (33%, 30% and 27% respondents in age-groups of 55-60 years, 61-65 years and 66-70 years respectively), said they are having trouble paying for daily needs. In fact have difficulty paying for food, fuel, utilities and medicine, and are responding to the situation by cutting luxuries and postponing major purchases and travel.

· Almost half of the government/ private employees in the age group of 55-60, have postponed their plans to opt for voluntary retirement scheme. On those studied, respondents aged between 65 and 70 are less likely than those ages 55-65 to have taken steps to cope with a slowing economy or increasing prices as a result of the recent economic slowdown.

· Respondents of strata 3 (66-70 years) were less likely than those of strata 1 & 2 (55-60 years and 61-65 years) reported having taken steps to cope with a slowing economy as a result of the recent economic slowdown. This does not indicate that the older population above 65 is more contented financially. Rather, the study suggested that persons in the age group of 66-70 years had already been adjusting their spending habits because of their status, fixed income and rising costs.

· About 60% of the respondents in this survey own stocks individually or through mutual funds and over 80% say they have lost money on these accounts in the year 2008. As a result of these losses 60% percent of these investors have changed their investment strategy to include more or less risk, such as FDs, NSC, Kisan Vikas Patra and other government sectors saving-cum-investment schemes.

· With food in short supply especially in Assam and Orissa in remote areas compounded by vicious cycle of cyclone and rainfall, older people’s coping strategies included reducing the size of meals (33%), skipping meals (17%), not eating at all on some days (9%), or going to relatives’ homes (11%).

· When economic problems force decisions, it appears that older persons have fewer decisions to make because their spending and economic activity has already been narrowed to necessities given their fixed incomes.


Table 1: Most common changes reported by Older Persons (55-75 years)

S. No

Particulars

Percentage

1

Postpone purchases (high value)

60

2

Postpone travel/pilgrimages

52

3

Less recreational activities

61

4

Avoid general Facilities & Services

48

5

Less expenditure on food & medicine

45


Table 2: Summary of information collected from respondents* by Interviewers

Sl

Age group

Nos. of respondents

Economy in bad shape

Affected by slowdown

Make changes in your spending habits

Changed investment strategy

Postponed retirement/Looking for gainful engagements

Dissatisfied with government role

1

55-60 years

500

451

445

185

316

371

435

2

61-65 years

500

431

419

160

270

246

411

3

66-70 years

500

418

284

101

188

210

315


Total

1500

1300

1148

446

774

827

1161


Overall the survey shows that there is a sense of shared pain and common concerns among young older persons (55-65 years). Almost 80% of the respondents in these groups feel that their elected representatives are not doing enough to help people caught in the economic squeeze.







Symposium - "Impact of Recession on Older Persons"

Gulmohar Hall, India Habitat Centre, Lodhi Road, New Delhi
  • Conducted on 17/01/2009
Key Speakers
  • Mr. Gautam Bhardwaj, Director, Invest India Economic Foundation
  • Dr. Shashank Saksena, Director, Deptt. Of Economic Affairs, Ministry of Finance, Govt. of India
  • Mr. Prabhakar Sinha, Times of India
















Global Recession - a concern for the Aged in India,

Agwell’s Perspective


Global economic crisis has slowly started shaking up the Indian Economy too. There are differences of opinion with respect to the magnitude of its effects in terms of percentage, but there is no denying the fact that the infection has started spreading gradually into the financial and economic health of the Nation which is reflecting upon the living of the young but also on the working & savings of the retired and the old persons who had taken their investments into the new found financial offers in the growing economy over the last few years.


Persons of age sixty and older – along with those in other age groups - have been buffeted by decreased returns, layoffs and reorganizations that have been spawned by the economic downturn in decades,” as stated by Himanshu Rath of Agewell. “Senior workers are especially vulnerable because it takes them longer to revise their investments and also find new jobs or financial coverage.”



“As part of our effort to help those vulnerable workers, Agewell has established a one-stop job exchange platform – “Eklavya”, to help in the job search,” Himanshu Rath added.


The US economy is worst hit leaving more than 5 lac Americans jobless, in Britain it has dangerously increasing every month. Thousands of European and American citizens are left homeless now due to debt-fuelled housing bubble.



Indian economy, though in stress, has been doing fairly good, especially in view of prevailing economic malady all around. The growth rate is expected to be 6.5 to 7.5%, if not more. The loan waiver of the Union govt announced in the budget this year has provided stimulus to this sector and is working as bailout package for the farmers, specially the elders of the family in the rural.


It is established that the economic policy of any country is not governed by the kind of people who govern the country; rather by the kind of people governed. It is here where the crux of the problem as well as solution is identifiable.


Instead of looking upon the west and US, we should concentrate on evolving strategies to mitigate the after effects of global contraction by increasing the domestic saving of the elderly and thus increasing the domestic market demand.


Agewell has been in service to the elderly for the past decade and has been internationally involved with international organisations for the welfare of the aged. The concerns that globally are now being faced by the aged in the country need to be also addressed by the Prime Minister to ensure their creating a better life continuity. Better interest rates on fixed deposits, well packaged insurance policies, easy housing norms will g a long way in acquiring the support and relief.



SYMPOSIUM ON NEEDS & RIGHTS OF OLDER PERSONS

Gulmohar Hall, India Habitat Centre, Lodhi Road, New Delhi
  • CONDUCTED ON 22/11/2008

Key Speakers

  • Dr. Anup Kohli of Apollo Hospitals