Professional Documents
Culture Documents
Mukul G Asher
Professorial Fellow, National University of Singapore
Director, Public Policy, Global Village Foundation
Email: sppasher@nus.edu.sg
Session 9, Asia Social Presentation Week, Asian Development Bank, Manila: August 1-5, 2016
DISCLAIMER: This presentation does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government
cannot be held liable for its contents.
Introduction
1. Focus on pension system as a whole rather than individual
pension schemes.
The discussion on pension reform needs to be from a systemic
perspective and not just focused on individual pension schemes in
isolation. This suggest that each individual pension scheme need
not provide the full income needed in retirement.
The pension benefits received by households, in terms of a bundle
of services, should be the focus. This will include both market and
non-market activities.
As an example in India, the program to provide cleaner cooking
fuel such as LPG, and moving away from wood and coal-based
fuels can impact household welfare, even though this is not
market-based. Similar reasoning applies to services to the elderly in
areas of healthcare, public amenities, etc.
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Introduction
2. Context-specificity & Transition Costs
The emphasis in pension reform is usually on best practice
arrangements. The discussion is usually normative.
What however matters is the context-specificity and the
manner in which and costs of transit from existing set of
trade-offs in the pension scheme to a better set of tradeoffs.
In pension reform, the best should not be the enemy of the
good.
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Introduction
3. Reforming Provident and Pension Fund Organizations
It needs to be recognized that government organizations provide
these services, therefore their effectiveness and citizen-centric
processes and personnel are essential.
This area concerns improving public sector management,
organizational effectiveness, and psychological aspects on how
the bureaucracy communicates and treats members of pension
fund organizations.
If pension reforms are to be effective, the current organizational
structures, processes, and mindsets cannot be left untouched.
Introduction
4. Approach to generate fiscal space should be made in an
integrated framework rather than individual items of
resource mobilization.
An illustrative framework is provided in Figure 1. This
framework has which has three distinct yet interrelated
components
enhancing rate of growth and broadening its base;
improving revenue generation from conventional and
unconventional sources;
this will require not just focusing on income and expenditure flows but on using
the state assets and regulatory powers to generate revenue.
Complementary reforms in
such sectors as labour
markets, regulatory regimes
to facilitate growth
Constructed by Authors
Better Expenditure
Management to obtain value
for money
Non-Conventional Sources
Use government
assets(e-g-land mining
assets) more
productively using post
offices for telecom
towards is a good
example
Reform and use Capital
Markets, e-g for state
and municipal bonds,
monetizing housing,
gold & other such
assets
Better use of
Regulatory charges and
levies
Financial Transaction
Tax (FTT)
Remittances from
abroad
FSF: Growth
Enhancing Rate of Growth and broadening its base
FFS: Revenue
Conventional Sources
Non-Conventional Sources
FSF: Expenditure
Better Expenditure Management to obtain value for money