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Why cricket icons promote wobbly mutual fund SIPs
Is the government going to force millions of citizens to save money for their old age from their own savings?
Tendulkar and Dhoni promoting mutual fund SIPs. / YouTube
The recently concluded T20 World Cup series was important for more than just the cricket on the screen – a number of former cricketers endorsing almost every day, the somewhat questionable advantages of doing mutual funds on a monthly investment plan. This was something that we haven't seen for many months now.
The agenda behind this and that Sachin Tendulkar, MS Dhoni, Rahul Dravid and the likes all went enthusiastic for what?
They called SIPs, or systematic investment plans, using mutual funds was often breathtaking. It didn’t take too long to figure out why the government in India is so keen on pushing people to work out their own mutual fund pension benefits.
There was a time when the private enterprise in India was mandated to use services like the employees provident fund, and was forced to contribute, equal in many respects to the one invested by the employee. And the whole process was carefully audited.
Well, those days are gone. For some years now, the present government, at least the one which has come to power again in India, with a reduced majority, has been fiercely evangelizing what it called the Employees Provident Fund Organisation.
Many of these so-called pink papers or the economic and financial weeklies have been falling over themselves to recommend this as a National Pension Plan. Well, it's easy to see why. Unlike the EPFO, the National Pension Plan doesn't obligate the government to spend even a paisa towards the pension. Every employee needs to save, for the bulk of his or her life while still in middle age, to around the age of 60, withdraw a significant corpus of this, and get it instead of a monthly payment of old age pension.
This is all very nice for the government. You are relieved of the obligation even to mandate private companies to spend money out of their pockets to build up a pension plan for their employees. The enthusiasm with which our cricket icons dealt with, multiple times a day, endorsing this scheme, only shows that the government has much to gain and almost nothing to lose by people using their own money to save. And then somehow creating an illusion that this was a pension.
Mind you, in most democratic countries, especially the ones that have strong a strong socialist bias like the ones in Western Europe, it is obligatory for contributions to be made by the state towards the citizens, for the rest of the citizens’ retirement life.
Not in India, apparently which has done a political lurch towards the Right.
So is this the way of the future? Is the government going to force millions of citizens to save money for their old age from their own savings, and start early, 40-50 years before that money becomes payable? Political commentators suggested some more accountability in the face of larger representation from the opposition parties.
Well, not here.
To make contributions towards their employees’ pension is no longer enforced. Or even considered worth enforcing. Welcome to 2024 post-election India. In the US, the word liberal increasingly is like the other word woke, a bad word, something to be shunned. Join the club.
(The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of New India Abroad)
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