governance, political economy, institutional development and economic regulation

When I’m 64

Paul Mccartney

(photo credit: wikipedia)

Paul McCartney -he of the long, brown hair who hung out in the company of the Beatles in the 1960s-wrote this song when he was just 16. Clearly he was not an economist and didn’t need to be hesitant about asking his “love” to project forward by 48 years, her likely feelings for him at the ripe, old age of 64. We don’t know what she told him then, but today it is unlikely to be the right thing to do.

First, not many lose their hair by 64 and the ones that do, get them back with renewed vigour, courtesy a visit to Dubai for a hair boost. Second, it is unwise to ask the modern spouse if she would lock the door if you remain out till 3 AM. The likelihood is that you would be opening the door for her when she comes in at 6! Third, the role distribution between men and women is no longer about the former mending a fuse and the latter knitting a sweater. Nor do women typically look forward to have three grandchildren dangling at their knees. But Mccartney got one thing right when he plaintively asked “will you still feed me when I am 64”.

The way to a man’s heart remains via his stomach and it is not just food that we refer to. In rural areas women have traditionally done most of the drudge of farming, animal husbandry and cottage industry along with fetching firewood, water and often carrying the weekly supplies home from the village market.  But now, even in urban areas, supporting the family by earning an additional income has become a critical role for women. In fact several studies of recent migrants to urban areas find that women adjust far better to the demand for skills in cities than men. The bulk of the labour demand in the urban informal sector is for housework and hospitality related jobs. Nannies in Gurgaon earn Rs. 40,000 a month, the same as recently graduated engineers. Women are better equipped to meet this demand than men, who tend to slide down the labour profile, from being proud farmers to become daily wagers in manual unskilled muscle-power related work or fall into petty crime. A woman with a steady income is consequently not to be sniffed at.

Even amongst the rich, women today play an important role in salving the stomach. Take for example the case of club memberships in the megacities. With a limited number of “legacy” clubs- leftovers from the colonial past- and growing demand, membership of a decent club has become a problem, even if you don’t have Groucho Marx’s hang up of not wanting to be a member of a club which would accept him. Most clubs however do have fast track arrangements for women memberships. A spouse, with a membership in these “legacy” clubs, is consequently a fairly efficient way of ensuring perpetual access to decent food and booze at ridiculously low prices, relative to the extravagantly generous environs.

Our PM Modi is already 64 and so must sympathise with the problems of his age cohorts. We know that this makes little electoral sense for him. After all, less than 5% of our population is above 64. Far better to cater to the 80% who are below 44. But here four things the PM should think about.

First, caring for the elderly is no longer a family effort. Nuclear families and migration make that impossible. Catering to the health needs of the old is a completely different specialization than looking after working adults. India is hopelessly deficient in this skill and public health institutions do not even waste their time on this “marginal” activity. The one thing the PM should remember is that social norms are built around how the elderly are treated. Even elephants will remain with a sick and elderly herd member, providing comfort and company. Should India not have a similar publicly funded HealthLine for the elderly?

Second, better nutrition, awareness and altered social expectations have enhanced longevity. The fond, greying, father marrying off his daughters and setting off for pilgrimage; his worldly duties done, is a Bollywood caricature, observed more in the breach, than in real life. India does not use its elderly purposefully. We tend to look at the “jobs and employment” pie as fixed. An elderly person occupying a job is seen as one job less for the young. This age based discrimination violates the fundamental principle of human rights and the economic principle of merit-based employment. Callow youth can be a disadvantage in many jobs and experience coupled with reasonable health, an economic virtue. A society which seeks to provide productive employment to the “specially enabled” cannot logically discard the elderly from its work force.

Third, the PM and FM Jaitley should regulate our private Medical Insurance Industry better. These companies blatantly cherry pick medical cover for those above 60 and make it available only to those who can either fudge their heath reports or to the few who enjoy “perfect health”, even after 60 and that too at astronomical premia.  There is no insurance cover available for those who have the typical “old age” health concerns of hypertension; diabetes and other assorted pains and aches. The pity is that there is significant demand from those who are more than 64 and can pay handsome premia but who want to insure against all possible “old age health risks and care”. Surely there is a business opportunity there which Insurance Regulatory and Development Authority (IRDA) should nudge the private health insurers to exploit as a desirable private good?

Lastly, FM Jaitley was recently reported as supporting the reduction of interest rates for kick starting the stagnant realty sector. Whilst, setting interest rates should be strictly in the purview of the RBI Governor, could Mr. Jaitley please think about extending tax and interest rate benefits to “retirement homes” of which, yet again, the supply is far less than the demand, across all price segments. Caring for the old and giving them a good send-off when they die, is a nit-picky, long term business investment and does not lend itself to the typical realty practice of theme of doubling your money in two years by hiving off an leveraged assett. Big, established, realty and hospitality companies, with a reputation to protect, can only be attracted into the retirement home segment if the deal is sweetened by government.

Hopefully the FM will include this “public benefit” in the 2015 budget. This writer is waiting to sign up for one such “home” now that I am 62.

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