Chinmaya IAS Academy – Current Affairs Chinmaya IAS Academy – Current Affairs
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Syllabus: Welfare schemes
Context
Around 53% of all of the salaried workforce does not have any social security benefits in India, according to the Periodic Labour Force Survey Annual Report 2021-22
- no access to a provident fund, pension, and health care and disability insurance.
- Meanwhile, gig workers, or approximately 1.3% of India’s active labour force, rarely have access to any social security benefit.
- India’s social security system is also ranked poorly; Mercer CFS ranked it at 40 out of 43 countries in 2021.
India’s policymakers have largely ignored social security. While policies are often announced, budgetary allocation has always been limited and utilisation even less so. In FY11, the National Social Security Fund was set up for unorganised sector workers, with an initial allocation of just ₹1,000 crore to support schemes for weavers, rickshaw pullers and bidi workers to name a few. The amount was a pittance when compared to a requirement of over ₹22,841 crore — as estimated by the Centre for Budget and Governance Accountability. A Comptroller and Auditor General of India (CAG) audit on the scheme in FY17 identified ₹1,927 crore (the entire amount accumulated since inception) had just not been utilised. Consequently, select social security schemes have been left moribund.
Reforms undertaken
The government pushed for a Code on Social Security in 2020, which sought to provide a statutory framework to enable social security for the urban and rural poor, construction workers, those in the gig industry and informal sector workers — it proposed the provision of life insurance, disability insurance, accident insurance, as well as maternity and health-care benefits along with old-age protection and crèche facilities for gig workers.
A push for greater digitisation under the e-Shram platform has enabled the enrolment of approximately 300 million workers while expanding coverage of accident insurance (of ₹2 lakh cover) and disability (of ₹1 lakh cover).
Steps for India to take
India should aspire to provide social security to all of its workforce, in a manner that is fiscally and administratively feasible.
Three broad principles come to mind:
- we must expand employer and employee contribution under the Employees’ Provident Fund Organisation (EPFO) system for formal workers.
- For informal workers with meaningful income (whether self-employed or in an informal enterprise), partial contributions can be elicited, along with persuading informal enterprises to formalise and expand their total contribution. those who are unemployed or have stopped looking for work, or do not earn enough, the government should step in.
- It is estimated that the cost of providing social protection to the poorest 20% of the workforce would be ₹1.37 trillion (including those who are elderly, pregnant or disabled) — a cost of approximately 0.69% of GDP in FY20.
- There must be a push for a pan-India labour force card and an expansion of existing successful schemes such as the Building and Other Construction Workers Schemes to other categories of workers.
- Special attention is required for domestic workers (usually female), who are never sure when their employment may be terminated. Domestic workers must also organise themselves across India’s cities.
- Migrant workers often face discrimination and suspicion from authorities in their working area so coverage of social services such as child care can be expanded.
With jobs becoming increasingly on-demand and hire/fire policies proliferating, India’s workers are increasingly insecure on the job front. To have the fruits of growth trickle down while offering a sense of social security, policymakers must discard supply-side shibboleths to embrace policies that enable equitable growth.
