Hari Lakhera

Demonetization has affected the seniors adversely. The stated objectives of it are laudable but will they be effective in the long run is any body’s guess. But enough has been written on that. Here I will deal with the problems seniors faced during the last weeks and what they will be facing in coming years.

The first and foremost is the reduction in FD rates by banks because of falling interest rates on loans as a result of demonetization. Given that government has opened another avenue for seniors by announcing 8% assured monthly interest on deposits of up to Rs. 7.5 lacs for 10 years, how will it mitigate their sufferings is not clear. Clubbed with Rs. 15 lacs under senior citizen savings schemes interest reduced to 8.6% the maximum one can earn is Rs 1.8 lacs in a year which is measly Rs. 15000/- per month. It is impossible to meet the expenses of a senior couple particularly when medical expenses are mounting.

Most seniors want to live an honorable independent life with their retirement fund invested in secured instruments like FDs. They do not want to be dependent on their children for their upkeep. With reduction of income on their investments, they will have no choice but to seek help from their children.

Some may be tempted to invest in stocks for higher returns and may lose their hard earned savings. This will be a big blow to their life.

Some will be forced to sell their houses and move to less expensive rented accommodation. Property prices have come down and they will no choice but to accept whatever they can.

Seniors with pension benefits may be a little safe as government is generous enough to increase the same from time to time but those who retired from private sector with no other retirement benefits except their savings will face the brunt.

Banks are flooded with funds and will lend it at low rates for home and other soft loans which will increase the consumption but also increase the prices of essential commodities. This will be another blow to seniors. Seniors depend on domestic helps but they too will ask for higher wages. Prices of essential drugs, doctors fee and hospital charges have already gone up.

In short, seniors will face the twin blow of reduced income and increased expenses.

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7 responses to “Demonetization and its Impact on Senior Citizens”

  1. GANDHI MOHAN BHARATI says:

    Well, I may not live long. Why should I support this Government? More over they do not give fixed returns on Senior Citizen’s Saving Schemes; it is changed every quarter.
    May be they are bent on giving loans at cheaper rate and writing them off later

  2. K H Mahajan says:

    I am retired from Private sector therefore no pension. I am totally depend on Bank interest. I want that special interest rate should be given to senior citizens Therefore term should be not more than 2-3 years and interest rate should be minimum 8.5%. Further PF family pension should be linked to dearness and minimum should not be less than 1500/- PM Thanks

  3. R P BHAGAT says:

    Really it is a burning issue and govt.must looked in to it.The govt. is issuing slogan that respect the senior people. This banner and slogan can’t fill the belly and provide the respect from children.We save our earning for our children but what we get from them ?.The govt must ensure good return on our hard earned money.

  4. E Vishwa Nathan says:

    I am glad some one has come up with this problem faced by senior citizens who constitute nearly ten percent of the population.If the government has any concern for this section of the population, it should come out a comprehensive senior citizen policy in the budget, ensuring decent income, medical and other facilities, considering that during their working age they have paid a hefty tax.

  5. Kochumani says:

    I agree with you Mr. Hari. I am senior citizen retired from private sector with a retirement fund of Rs. 5 lakhs only (most of the high profile people are not aware of the retirement fund received from private sector for a executive grade person) which is kept as FD for which I am getting an interest of 7.5%. My only child is still to settle down. My worries are increasing day by day for the reasons mentioned by you. How will we manage our life?

  6. S.Kalyanaraman says:

    I entirely agree with you.
    we should make a plea to PM so that with a savings of Rs.40 lacs, monthly Rs.30000/- is assured which means a pre tax return of 9%.

  7. venkat says:

    The ten year slot for senior citizen is eternity. Senior citizens will be reluctant to lock up money for 10 years for the sake of interest. ten years slot must be reduced to one year.

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