Context: As the number of senior citizens increase – from 10.38 Crore in 2011 to an estimated 17.3 Crore in 2026 and 30 Crore in 2050, the government is exploring ways to promote the idea of 'Silver Economy' by developing residential and infrastructure facilities of different grades for senior citizens through public-private partnership for a dignified and safe aging experience. 
Silver Economy: A potential driver for India’s growth

• The longevity of the economy is about leveraging a healthy population’s potential to drive demand while also extending the earning cycle beyond the traditional age bar of 60. 
• Being a consumption driven economy, India will benefit immensely from increased consumption of goods and services by the senior segment.
• Keeping a vast population healthy, however, will be a major economic activity. There will be enormous opportunities for those investing in the silver economy such as social upkeep, health, recreation, and asset management. 
• The new-age economy will also ensure a large supply of skilled and experienced workforce.

About Silver Economy

• The Silver Economy is dedicated to the elderly in our societies. As its name suggests, the Silver Economy is not a “market” but a cross “economy”.
• The population ageing process is real and impacts every market and industry, such as: home accommodation, transport, food industry, insurance, robotics, health and e-health, , communications, Internet, sports and leisure.
• All these markets are already adapting to ageing process.
• Whether we are talking of the greying economy, the ageing economy or the Silver Economy, alluding to the greying hair of the elderly, governments and industry players imagine new policies and products in order to respond to the ageing population needs.

Need to concern

• The rapid growth in the senior population is transforming societies across the globe. At the same time, it is forcing both developing and developed markets to revisit their existing economic models to consider the financial and social needs of the ageing populations. 
• Globally, the proportion of people over 65 years of age was 10 percent in 2012 but it is expected to jump to 22 percent by 2050, according to estimates by the World Economic Forum.
• In OECD countries, the ratio is projected to increase, on average, from 23 percent in 2011 to 35 percent in 2030.
• The increased life expectancy and the declining birth rates across the world are converging to create this unprecedented demographic shift. 
• Changes of this proportion will be fiscally unsustainable for a world that is already reeling under a prolonged period of slow growth and escalating trade tensions.
• The slowdown in population growth is already sending economic shockwaves through society, affecting relations between generations, sexes, nationalities and even the contest of man versus machine.

Indian Scenario

• A study by the Confederation of Indian Industry (CII) reveals that the elderly population in India is expected to triple from 104 million in 2011 to 300 million in 2050, accounting for 18 percent of the total population in 2050. 
• This is a significant change for a young country like India that is yet to fully tap its existing demographic dividend.

Shifting demographic trends demand policy reforms and cultural change

• The demographic changes in the country call for appropriate economic and social innovation underpinned by adequate policy reform and profound cultural transformation. 
• While the Draft National Policy for Senior Citizens 2020 has been brought out at the right time with strong recommendations to promote the silver economy, a lot more needs to be done to drive the silver economy and to cater to the diverse needs of the senior population.
• The global spending power of this generation is expected to reach $12 trillion by the end of this year. The professional service requirement, as a result, is likely to witness a manifold increase once economic activities pick up speed. 
• With the increasing requirements, private investment can drive innovation and market growth in this segment. 
• It is important to promote social entrepreneurship to accelerate the growth of the silver economy. Effective public policy has an important role to play in creating an enabling environment for these efforts to bear fruit.

Challenges in India

• However, there is evidence to suggest that unlike in the West, due to existing socio-cultural norms, retirees in India tend to go into a shell, which further aggravates their health issues. 
• Given the job challenges in India, conventional reemployment format may not be a viable solution but there is still a need to tap into the vast talent pool of retirees. This will only happen if millions of retirees are encouraged to take up new responsibilities in the formal sector.
• This, in turn, will require new labor formats. Ageing, while described as a looming demographic crisis, also offers its own silver lining.

Steps taken by Government

• However, it is noteworthy that the government of India has taken proactive steps to address the concerns arising out of the increase in ageing populations. 
• One such step is the Draft National Policy for Senior Citizens 2020, which seeks to create a strong silver economy that caters to the new and evolving needs of seniors in the country. 
• Besides, the government recently launched the Decade of Healthy Ageing (2020-2030) campaign to offer support to seniors and ensure easy access to age-specific products and services for them.

Government intervention is critical in the following areas

• Recognising Senior Care as a Sector: Senior Care needs to be recognised as a sector with appropriate regulations, policy support, tax structures, availability of subsidised financing, and appropriate governance mechanisms. This would attract greater investments and encourage private sector participation.
• Tax incentives: Expenses on senior care solutions (like home care, care homes etc.) should be exempted of any taxes to enable faster penetration of such products and services. This will increase private sector participation and enhance the overall quality of service.
• Providing access to low cost funding: Currently the senior living players find it difficult to raise funds for development of senior living communities. Developers either have to rely on advances from customers or infuse equity. Higher input costs lead to higher price for seniors. It therefore allows only a small segment to buy or lease senior communities. Lower financing costs would allow for more affordable senior living and senior care projects.
• Preferred status for land allocation and payments: Availability of land at lower prices than market prices and the option of staggered payments at lower interest, would also help in keeping the cost of living arrangements, especially in metros, at an affordable level. This will further help in removing entry barriers and bolster growth of the silver economy.

Road Ahead

• As India is poised to witness a surge in its senior population, policy support will be required to promote both the demand and supply of senior specific services to tap the economic potential of this segment. Governments, businesses, and individuals must work together to adapt policies and behaviors to ensure individual and national fiscal sustainability as the population starts ageing.
• A critical step in this direction will be allowing people to work longer and helping them plan better for their retirements, while offering critical support to the senior care industry to provide necessary services at affordable rates. This will not only create a win-win model for the consumers and the industry but will also create a national ecosystem that manages the population ageing smoothly.