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.