19% Kerala population above 60; RBI flags urgent need for pension, health reforms

THE Reserve Bank of India wants Kerala to age gracefully and responsibly.

- RAJESH ABRAHAM @KOCHI

Categorising the state as an “ageing” society, with 18.7% of its population now above the age of 60, the RBI has called for a set of urgent reforms—from restructuring of pensions, to extension of the retirement age and changes to financing of healthcare. With the state’s elderly population projected to rise further to 20.9% by 2031 and 22.8% in 2036, it warns that ageing will steadily tighten fiscal space and strain social sector spending unless the government acts early with structural policy measures.

The guidelines are part of a report, titled ‘State Finances: A Study of Budgets of 2025-26 - Demographic Transition in India: Implications for State Finances’, released by the central bank on Saturday. The report links demographic change to the long-term sustainability of regional budgets and argues that states like Kerala and Tamil Nadu will face mounting pressure from higher old-age dependency ratios, rising pension commitments and greater healthcare needs.