Plight of private sector seniors

Employees of the public sector earn a stable pension and it has been brought to light that though it is consistent there is no relationship to the cost of living and this is rightly so and they need redress.

However, in the case of a private sector employee, he depends on the interest given by a Finance Company which keeps on fluctuating at the dictates of the Central Bank.

The present Government has directed that monthly interest income to a limit of Rs. 250,000 should be free of tax. To obtain an income of Rs. 250,000 per month an individual must have a fixed deposit of Rs. 25 million rupees and hypothetically if he gets an interest income of 12% per year.

The question is how many employees of the private sector retire with this amount? Depending on the category of the employee the retirement benefit of employees very much differ. If on the other hand, an employee retires with Rs. 5 million at 12% interest he will get a monthly sum of Rs. 50,000. This is certainly not an income to meet the high cost of living. Of course, if he invests Rs. 1.5 million in a bank he would then get marginally more. If the interest rate drops from 12% to a single digit the poor private sector employee is in dire straits.

If he gets a retirement benefit of an amount less than Rs 5 million he is even worse off, and with progressive interest rate reduction, the adverse impact on the private sector employee is much greater.

The above detail numbers are given so that the Government would realize the true plight of the retired private sector employee. The revision of the tax rate and the removal of VAT has been implemented in view of the rising cost of living and the Government must consider these factors and take steps to reduce the burden on these people.

If on the other hand, an employee retires with Rs. 5 million at 12% interest he will get a monthly sum of Rs. 50,000. This is certainly not an income to meet the high cost of living.