Union Budget 2023: What Senior Citizens Wanted, What They Received

What were senior citizens’ expectations from the budget, and what were their gains? 

As the government prepared to publish the Union budget on February 1, organisations such as Helpage India and Agewell Foundation made recommendations, and senior citizens also voiced their needs. An increase in old age pension, more relief in income tax, and GST exemption on services and products frequently used by the elderly were some of the needs voiced by the elderly ahead of the Union Budget 2023-24. According to the survey Role of Budgetary Provisions in Empowerment and Welfare of Elderly that was aimed to capture the expectations of the elderly, more than half of the 5,000 people polled wanted to emphasise schemes that might help retirees use their expertise and experience purposefully.

According to 45% of elderly respondents, the government should prioritise healthcare and support services for the disadvantaged and marginalised old. In addition, 43.5% of respondents felt that the overall state of social security programmes for the elderly in India is unsatisfactory.

HelpAge India also shared the recommendations submitted to finance minister Nirmala Sitharaman and highlighted the need to set up a special ministry for the elderly.  ‘India, with a current estimated elder population of 140 million, will be bracing for rapid ageing in the next three decades, with its elderly population set to explode by 20 per cent by 2047. Immediate measures need to be put in place to address their socioeconomic and health needs, which require a substantial allocation of resources. We request enhancing of old age pension to a minimum of Rs. 3000 per month, with priority on universal coverage for older women and the oldest old, incentivize caregiving by providing tax benefits to family caregivers, strengthening existing financial, healthcare and social care systems with a sufficient allocation of funds and urge the government to set up an Ayushman (Longevity) Ministry for Elderly for addressing the multifarious elder issues and managing the programs of elderly,” Rohit Prasad, CEO, HelpAge India was quoted saying.

To improve elder income security, recommendations were made by eldercare organisations that the old-age pension be made universal. The ideal monthly allowance should be Rs. 3,000, with the central government taking the lead in establishing a fundamental social pension floor at the national level. According to them a minimum increase in the Central Government's contribution to the National Social Assistance Program (NSAP) is needed, going from the current range of Rs 200 to Rs 500—which hasn't been updated in 14 years—to at least Rs 1000 per month for beneficiaries 60 and older and Rs 1500 per beneficiary per month for beneficiaries 80 and older. In most states, the old-age pension is on par with Rs 500. 

Additionally, recommendations were made to increase the income tax exemption threshold for senior citizens, which is presently set at 3 lakh for those aged 60 and over and 5 lakh for those aged 80 and over, to 10 lakhs. In particular, older ladies (60+) and all seniors in the oldest old section should be given higher limitations. Senior citizens' bank fixed deposit (FD) interest rates should be increased, and their income should be tax-exempt to ensure that the middle-class elderly maintain a quality of living. In many cases, this is their primary source of income. The senior citizen may currently deduct interest up to a maximum of Rs 50,000 under Section 80TTB. The upper limit could be raised to Rs 1,000,000 was the recommendation. Another ask was that a significant amount of money should be set aside for the efficient implementation and raising awareness of the historic Maintenance and Welfare of Parents and Senior Citizens Act, which ensures the security and dignity of elderly life.

Did the Union Budget 2023 fulfil these recommendations? 

Finance minister Nirmala Sitharaman offered seniors some benefits to improve their earning opportunities. Here's what they are:

The budget doubled the maximum limit under the Senior Citizen Savings Scheme (SCSS) to Rs 30 lakh from Rs 15 lakh. The scheme offers an assured interest of 8 per cent per annum. The interest is paid quarterly. 

The SCSS offers a risk-free return of 8 per cent per annum with interest payable quarterly and has a five-year lock-in period. However, it also allows for early withdrawal in case of an emergency. The SCSS account can be opened in a bank or post office, and while the scheme is for senior citizens above the age of 60, those above 55 and retired from service are eligible to open an account. 

Furthermore, the investment limit under the popular Post Office Monthly Income Scheme (POMIS) has been raised to Rs 9 lakh from Rs 4.5 lakh. In the case of joint accounts held in POMIS, the investment limit has been hiked to Rs 15 lakh from Rs 9 lakh. The scheme pays monthly interest at 7.1 per cent per annum. Both these investments are popular with senior citizens.

Under the new tax regime, pensioners are eligible for a standard deduction of 15,000 while claiming tax-related exemptions. 

The budget also announced 'Azadi Ka Amrit Mahotsav Mahila Samman Bachat Patra', a one-time new small savings scheme; its offering is a Mahila Samman Savings Certificate, which will be available for two years up to March 2025. It will offer a deposit facility of up to Rs 2 lakhs in the name of women or girls for a tenor of 2 years at a fixed interest rate of 7.5% with a partial withdrawal option.

Mathew Cherian, Board Chair of CARE India and Global Ambassador for HelpAge International, felt there was not much there for seniors except an increase in deposit limits. He offered an important point of view regarding the economically weaker section of seniors. “The budget left out poor senior citizens completely. There was no increase in pension. The deposit limit for senior citizens being doubled is only for those who have money to deposit in old age. What about the have nots?” He questioned.  

V Desikan, retired defence scientist and Silver Talkies Club, member, said: “my take on the budget for the seniors is that there is a small reduction in the income tax that we are paying currently,  but offset by the inflation. So we stay where we are now. Overall a popular budget.”

What was your take on the budget and its offerings for senior citizens? Please share your thoughts with us below in the comments. 

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