Why Budget 2024 may bring good news India’s senior citizens

Indians wait with bated breathe as Finance Minister Nirmala Sitharaman is all set to present the 2024 Union Budget. What makes the sacrosanct document so significant is the fact that this will be the first Budget of the Modi 3.0 government. The document will be tabled in the parliament on July 23 at 11 am.

While many focus on what changes Sitharaman is planning to present in terms of taxes and allocation of resources in the agriculture or manufacturing sector, the new government is expected to introduce various benefits for those who are planning to enjoy post-retirement benefits.

Here’s a look at how the budget is planning to assist the elderly.

Reforms in NPS

Major reforms are anticipated in the National Pension System (
NPS). Experts believe that the reforms could have the potential to reshape the landscape and enhance retirement planning opportunities. It is speculated that the Center may offer 50 per cent of the final pay drawn as a pension for central government employees who have enrolled under the NPS, Business Today reported.

In the past, the Centre has said that the NPS will offer attractive returns for those who are recruited after 2004. While ruling out the Old Pension Scheme (OPS), the government assured that it is actively exploring ways to ensure that all the employees enrolled in the scheme can potentially gain up to 50 per cent of their last drawn pay.

NPS comes with tax benefits 

Another speculation of the 2024 Budget revolves around the fact that there can be substantial enhancements in tax benefits for National Pension System (NPS) contributors.

As per our
previous report on the subject, experts anticipate that the government may raise the maximum deduction limit under Section 80CCD(1) of the Income Tax Act from the current Rs 2 lakh to Rs 2.5 lakh.

This could emerge as an incentive for taxpayers to increase allocations towards their NPS accounts and will enhance stronger retirement savings habits. According to Mint, experts speculate the introduction of Section 80TTB which would offer senior citizens tax-free interest income to ₹1 lakh from retirement-focused savings schemes.

Health benefits for the elderly under Ayushman Bharat Yojana 

Earlier this month, reports emerged that the newly elected government is planning to expand the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY) to include India’s senior citizens. The move will align with the NDA’s pledge to provide healthcare support to everyone over the age of 70 years.

Similar sentiments were echoed by President Droupadi Murmu in her address to the parliament. “Every elderly person above 70 will be covered and benefit from free treatment under Ayushman Bharat Yojana.”

It is also expected that hospitals with services dedicated to the elderly will be included under the PM-JAY scheme. It is pertinent to note that Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) is the world’s largest publicly funded health insurance scheme.

The initiatives became more significant at a time when elderly NGOs across India are urging the government to address the pressing needs of the country’s elderly in the upcoming budget. A significant demand is the revision of the central contribution to the old age pension under the National Social Assistance Program (NSAP).

Why now? 

Incorporation of the needs of senior citizens has become important now more than ever before. On Sunday, the United Nations Fund for Population Activities (UNFPA) chief Andrea Wojnar said that India’s elderly population is expected to double by 2050.

In an interview with PTI given days after World Population Day on July 11, the Resident Representative for UNFPA India, Wojnar stressed on need for more investment in healthcare, housing and pensions. She also mentioned that older women are “more likely to live alone and face poverty”.

In the interview, she noted that the number of individuals, aged 60 and above, is projected to double to 346 million by 2050. Hence, there will be a significant focus on what the 2024 budget will have in store for the senior citizens of this country.

With inputs from agencies.