Union Budget 2026–27 offers little real support for India’s growing, vulnerable elderly population
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Finance Minister Nirmala Sitharaman described the Union Budget 2026-27 as the ‘Yuva Shakti-driven budget’, which will help the country undertake rapid strides towards ‘Viksit Bharat’, India’s goal of becoming a developed country by 2047. India’s massive youth population is undoubtedly the country’s greatest economic asset, meriting policy attention and adequate public investments in skilling, education, technological upgrade, and state-of-the-art infrastructure for higher growth rates and better-paying jobs. However, the country is also home to over 149 million elderly persons (people aged 60 and above), more than the total population of the United Kingdom (69.2 million), France (68.5 million), and Germany (83.5 million). This group has grown rapidly in the last two decades and, as of 2022, it constitutes about 10.5 percent of the total population. Yet they rarely feature in policy discussions, and their concerns remain largely unheard.
Two of the most defining characteristics of India’s ageing population are ruralisation and feminisation. Over 71 percent of India’s elderly live in rural areas, and women constitute the bulk of this demographic. The elderly sex ratio is skewed in favour of women at 1,065 elderly women per 1,000 elderly men. Poor pension coverage and the preponderance of the informal sector, which employs over 90 percent of the population, leave old age in India marked by financial precarity and destitution. Nearly 40 percent of India’s elderly belong to the poorest wealth quintile, with 18.7 percent living without any source of income, which makes them extremely financially dependent on their family members. Elderly women who live longer and mostly outlive their partners are worse off, as they are barely educated, have higher morbidities, and typically lack any source of income.
Poor pension coverage and the preponderance of the informal sector, which employs over 90 percent of the population, leave old age in India marked by financial precarity and destitution.
Although government statistics regard 15-59 years as the working years, many elderly people undertake paid work even amid declining health and hard conditions, as pension coverage is extremely low in India. As per the Longitudinal Ageing Study of India, over half of the elderly men and 22 percent of elderly women in India are currently working, mostly in agriculture and allied activities, small businesses, and informal sector jobs. Their role in social reproduction is also rarely recognised. Elderly persons, notably women, spend many hours caring for their grandchildren and other family members and undertake other domestic work, including cooking, cleaning, collecting firewood, maintaining kitchen gardens, etc. Through their unpaid care work, they essentially subsidise the formal economy. Put simply, India’s elders are not exactly dependents. They are active contributors to India’s economic growth.
However, pension coverage is very low in India, and families, particularly children, are the primary caregivers for elders in India, with the government playing a minimal role. India currently has three welfare schemes for elderly persons from poor households under the National Social Assistance Programme (NSAP), viz. Indira Gandhi National Old Age Pension Scheme (IGNOAPS), India Gandhi National Widow Pension Scheme (IGNWPS), and the Annapurna Scheme. Under the IGNOAPS, the centre provides a pension of INR 200 per month for beneficiaries aged 60-79 years and INR 500 to beneficiaries aged 80 and above. IGNWPS provides a pension of INR 200 per month to widows from BPL (Below Poverty Line) households. In both schemes, states were encouraged to provide an equal or higher sum, so the actual pension amount received is a sum of the centre and state contributions. While several states like Haryana, Andhra Pradesh, Telangana, Kerala, Delhi, and Tripura provide much higher pensions, between INR 2,000–INR 2,750 per month, due to substantial state contributions, several states like Bihar, Manipur, Madhya Pradesh, Arunachal Pradesh, etc., make nominal or no contribution at all to IGNOAPS and IGNWPS. Consequently, the actual pension received in these states is very low and insufficient to cover even basic expenses. Under the Annapurna Scheme, the elderly persons above the age of 65 receive 10kg of free food grains. However, the coverage of the Annapurna Scheme is very low at about 1 percent.
India currently has three welfare schemes for elderly persons from poor households under the National Social Assistance Programme (NSAP).
The launch of the National Social Assistance programme was a significant step towards supporting elderly persons from the most vulnerable sections of society. Yet the centre’s contribution has remained relatively stagnant over the years, neither keeping pace with the growing elderly population nor inflation (See Figure 1 and Figure 2). Pension amounts are not inflation-adjusted and were last revised in 2012. Barring 2020-21, the year which witnessed a substantial increase in spending due to the COVID-19 pandemic, the centre’s expenditure on these schemes witnessed nominal increases over the last decade (Figure 1). Figure 2 shows a declining trend in central spending in real terms, particularly IGNWPS, which was designed for one of the most vulnerable sections of Indian society, widows. The current budget does little to reverse this trend. There has been no marked increase in the allocation towards IGNOAPS or IGNWPS this year. The budget estimate for 2026-27 is INR 6,904.9 crore compared to the revised estimate of Rs 6,460 crore in 2025-26, a mere 6.9 percent nominal increase. Such a small nominal increase will barely keep pace with inflation and be insufficient for any meaningful increase in pension coverage. The expenditure for IGNWPS has been kept at the same level as 2025-26 at INR 2,027 crore, implying a real decrease. Allocation for the Annapurna scheme has also been kept at the same level at Rs 10 crore, making any expansion of coverage unlikely.
Figure 1: Centre’s Expenditure on IGNOAPS and IGWPS (2016-17 to 2026-27)
Source: Union Budget documents various years22
Note: Figures from 2016-17 to 2024-25 are actual expenditures
**Revised Estimates
***Budget Estimates
Figure 2: Centre’s expenditure on IGNOAPS and IGNWPS in 2012 prices (2015-16 to 2024-25)
Source: Union Budget documents various years
Note: IGNOAPS and IGNWPS budget expenditure figures have been deflated using wholesale price index (base-2012)
Population projections indicate that India’s elderly population will grow rapidly in the coming decades. By 2050, elders will constitute over 20 percent of the country’s population, making elderly welfare a critical policy concern. Currently, the country’s elderly population, particularly from the low-income groups, are immensely vulnerable and require government support. Sadly, the budget does little to uplift them. The goal of ‘Viksit Bharat’ entails striving for a ‘society for all ages’, i.e. a society where all citizens are valued and can live a dignified, healthy, and happy life. For that, India’s elders must be able to participate in the country’s development and gain from it.
Malancha Chakrabarty is a Senior Fellow and Deputy Director (Research) at the Observer Research Foundation.
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Dr Malancha Chakrabarty is Senior Fellow and Deputy Director (Research) at the Observer Research Foundation where she coordinates the research centre Centre for New Economic ...
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