Pensioners of SBI need redress

 

Government patronage and Institutional apathy for the Senior Citizens run parallelly

B. Yerram Raju*

I am 80 years old and retired from the country’s biggest Bank, State Bank of India as a Regional Manager in 1994. I read with great interest the story put out by the Economic Times today from the horse’s mouth – the Minister.

The synopsis of the story in Economic Times of 11^th June 2022 attracted me most. India has 8.6 percent of the globally aged and such population is likely to move to 19 percent by the end of 2050.

Despite Article 38(1), 39 (e), 41 and 46 making it incumbent on the states to provide public assistance at the old age, mysteriously, lot many cases are hibernating in different Courts of justice, with Supreme Court, no exception.

Nearly ten thousand senior citizens who retired between 1991 and 1997 from the SBI, that include the Chief General Managers to Assistant General Managers, draw a measly pension of around Rs.28,000 per month, including Dearness allowance. With inflation now, their savings are getting negative returns. A few facts need public attention.

1.      Government appointed a Committee with Murmur as Chairman, and its report is still not implemented. Murmur Committee had recommended that the basic pension of Rs.4250/- has to be converted to Rs.7120/-. The eighth Bipartite retirees were paid pension on pay scale of eighth Bipartite from 01.05.2005; that is, those who retired between 01.11.2002 to 30.04.2005 were paid pension on old scale of Rs.4250/- whereas earlier seventh Bipartite Retirees were already paid pension of Rs.7120/-. This anomaly arose because of the policy of discrimination followed by the SBI and IBA while settling the issue of pensioners of earlier era.

2.      D.A. Formula – In the old Scheme D.A. on Pension was paid on Structured basis. With eighth Bipartite Salary Structure the System of 100% neutralization was introduced. Only 5th, 6th & 7th Bipartite Retirees are paid Structured D.A. The Federation submitted that when 100% neutralization has been accepted and introduced why deprive old Pensioners from this benefit? A small number of such retirees have survived, and it is not going to cost huge expenditure to the Bank.

3.      Commutation factor in SBI: The SBI retirees suffer double loss. The factor which is available in other Banks at the age of 70 is offered to SBI Retirees at the age of 60. As it is all the official get 40% pension. They, therefore, suffer double loss. We emphasized that Ministry should issue directives to provide commutation as per Industry Level norms to SBI Retirees.

Every effort made by the Federation of SBI Pensioners’ Association and even some individuals could not resolve the issue of the rise of basic pension from Rs.4,250 per month to the level obtaining in 2005 even after a wide range of discussions with the Indian Banks’ Association, SBI, and Department of Financial Services, Government of India. SBI has huge pension fund balances. Resources are not the issue for resolution.

Two questions become prominent here: 1. Despite SBI, a statutory institution set up under the SBI Act, having enough resources to raise the pension to such group, why should the bank look to the approval of DFS, GoI? 2. Why the DFS could not take the route of arbitration and conciliation instead of procrastinating the issue in the name and style of ‘matter is sub-judice’ when they were requested for approval, on the ground that a few individuals, seeing no easy solution raised the case with the Courts?

We not merely look forward to a peaceful and healthy life but also a life of dignity and honour. Government of India should bring in the issues of old age and pensions of statutory institutions under the ambit of the Department of Administrative Reforms, Pensions, and Pensioners’ Welfare to direct the institutions concerned to settle such matters through its arbitration not withstanding the cases in the Courts. Courts, to my knowledge and understanding, will be too happy if the parties come to a compromise and withdraw the cases.

National Policy for Older Persons (NP0P) should encompass all the older persons irrespective of the affiliation to a PSU and Atul Vayo Abhudaya Yojana that acts as umbrella for all government-aided schemes for the elderly, and SAGE would be meaningful instruments when their applicability is universal.

Department of Financial Services, GoI should confront a problem head-on and should have timelines for resolving the cases relating to pensions in PSBs and SBI lest many aspirants of justice get resolution only when they reach the grave. Let these hapless old age citizens – in the age group of 75-90 years, get relief sooner than later.

The views are personal.

https://timesofindia.indiatimes.com/blogs/fincop/government-patronage-and-institutional-apathy-for-senior-citizens-run-parallelly/

Published on 11.6.2022

 

Inflation - the hydra

 

Inflation – the hydra

B. Yerram Raju

Times of India Blogpost dated 29.04.2022.

Sweltering heat makes us look to June’s first monsoon showers as much as the monetary policy of the RBI looking at taming the inflation as its uppermost task. When Bloomberg mentions that the world is experiencing a synchronised inflation outbreak that previously seemed related to the US and Europe, and that producer prices are rising in Japan, South Korea, India, and all economies are feeling the heat of fuel and food prices, it has to be viewed seriously.

I tried to look at it from what is happening in the working class both in urban and rural areas in our country. Several state governments are indulging in competitive populism, notwithstanding the ever-rising fuel prices.

My house cleaner has a couple of acres of land in Mahbubnagar district of Telangana. She gets her minimum wages when she abstains from the work in our house, at least four days a month and seven days at least once in a quarter. Her logic: Every office has one Sunday and two second Saturdays as holidays. Why should I not get the same? She works as house cleaner for ten houses with an average income of Rs.2000 per month per household. She gets free ration; free medical treatment in the government hospital if she or her family members have illness or accident. Her husband is a fruit-seller on bicycle. His net income is Rs.15000 a month and recently he got a loan of Rs.10000 under the street vendors’ scheme that helped him buy a cooler to the house. She has put both her sons in a social welfare residential school. She is also not bothered about income tax though her family income exceeds the taxable income. She has Aadhar card and felt needless to have PAN card! She is least bothered about inflation.

In a chat with her, I and my wife realized that most house cleaners are in the same boat as her and they only have to pay rent. Some of them are also expecting to move to their own two-bedroom flat promised by the government. I went to a village on the way to a temple in Sangareddy district. That was a shandy day. Hence most villagers are in shandy either as buyers or sellers. I got down from the car, a little uncared for the anger of my wife. She knows that when I get down on such errand, I would take at least thirty to forty-five minutes to be back.

I enquired from around twenty persons regarding the price-rise. They mentioned only two things: one, Fuel price and two, Oil price. No others mattered to them. At least one person in every house has a motorcycle. Every family has a piece of land either owned or leased. They are bothered about the wages for the farm labour. They sky-rocketed. They are planning to go for farm machinery either in groups or go for hiring it to reduce farming costs. They are bothered more about increasing unrest in villages due to family feuds.

Inflation therefore has not figured much in the conversation. Rise in wages is an issue but related to inflation. Not that the rising inflation indices – consumer price indices crossing the RBI headline boundaries – is not a worry. The fact is that there are several factors that do not get into inflation accounting. The rents in urban areas are on the rise despite a boom in real estate and housing and cheap housing loans.

If interest rates rise, the cause will not be so much the inflation as the non-performing loans in the retail sector, protracted corporate loan recoveries after severe haircuts, under the most permissive route of Indian Bankruptcy Code proceedings.

Union government has a responsibility to look at the fuel prices beyond the revenues that are earned out of them. Most of the states have genuine concerns over the cess and it is time to be transparent and remove all the cess as the purpose for which cess is levied and spent are never coordinated. For example, look at the similar rise in fuel prices globally in 2014 and 2015 and the domestic prices. Can we get back to the comparable barrel prices and retail prices of fuel and gas?

Once the interest rates rise, the scope for real interest rates to pare up and comfort the savers exists and the hapless senior citizens will have a sigh of relief. Real interest rates are currently negative and hopefully the June monetary policy of the RBI will bend the hydra.

*Author is an economist and risk management specialist and the views are his own.

https://timesofindia.indiatimes.com/blogs/fincorp/inflation-the-hydra/