Speaking at the CII's insurance summit here on Monday, he said, "India has the advantage of having political consensus on the need for pension." He, however, added that political consensus can't be built overnight but it can be lost in very little time.

Another advantage India enjoys is that there is an existing regulatory regime, Arrighi said. There is also a small group of professionals who are well-versed with the concept of pension funds.

He also expressed satisfaction over the fact that there are well-educated people in India and modern technology is in use. It is time to use the consensus for pension reforms.

On the negative side, the sheer size of India, its large population and remarkable diversity make the task very difficult, Arrighi said. Another problem is that a substantial part of the population isoutside the organised sector. This makes it very difficult to bring them under the pension umbrella.

He pointed out that the wide disparity in wealth and income is a big constraint. Besides, there is absence of a developed equity market. Yet another hurdle is that even most educated people know very little about financial matters, Arrighi said.

He said that most countries are experiencing considerable demographic changes that would cause them problems unless they introduce a pensions regime that is effective in encouraging private self-provision, involving a mix of compulsions and inventives.

Arrighi said that in an effective pensions regime the government must keep the people informed of the likely value of state pension provision in relation to future living standards. Further, the self-employed should included within a single regime.

He also emphasised on greater funded provision, even if stock markets become crucial to success.

DS Narain, former member of the Insurance Regulatory Authority, saidthat with average life span expected to be 60 years in 2016, and 21 per cent of the population above 60 in 2050, the need for a pensions market is very acute.

Mukul G Asher, associate professor at the National University of Singapore, said that the pensions regime should not be rigid and there should be flexibility in the system.

He pointed out that fiscal reforms are a prerequisite to pension reforms. The latter cannot be seen in isolation. He also laid great emphasis on transparency.