Globalisation, Demographic Transition and Reform of Social Safety Nets in India

This paper accepts Rodrik’s premise that globalization and associated changes have increased the urgency of developing social safety nets to: Cushion transition; Help maintain legitimacy of reform, and help avoid backlash against reforms. India’s calibrated globalization thus requires appropriate social safety nets (or Social Security System) But such a system must be affordable and sustainable individually, fiscally and with appropriate labor market and other incentives. The pension reform process is creating a knowledge and information base in India which could be drawn upon by all stakeholders for better policy formulation and evaluation. Challenges in social security reform however are huge, as they require parallel reforms in labor markets, financial and capital markets, fiscal systems, organizational and administrative reform, and close co-ordination among various regulators.