The call for a large safety net -Somesh Jha
Social security cover for all, even informal workers, is an ambitious target for the Centre and stumbling blocks pave its path.
The Union government on Thursday proposed an ambitious law to provide social security net to the 47.41 crore-strong workforce of the country.
The proposed code on ‘Social Security and Welfare’ intends to make a drastic shift in the social security framework of the country from an employment-based approach to a rights-based approach followed by some developing countries such as South Africa.
This means claiming social security benefits will become a right for everyone who joins the workforce. At present, the social security set-up in India is only restricted to the formal sector where the employers make a contribution towards social security schemes such as provident fund, insurance and pension of the workers.
Only about 8% of the informal sector is covered under any social security scheme, according the National Commission for Enterprises in the Unorganized Sector (NCEUS). At present, 82.7% of the 47.41 crore workforce is in the unorganised sector and does not have access to any kind of social security, according to the Labour and Employment Ministry.
When the draft code takes final shape in the form of a law, there will be universal coverage of social security schemes guaranteeing equal treatment to all the workers.
One for everyone
According to the proposed law, factories employing even a single worker will have to contribute towards social security benefits. Also, even households employing domestic help will also have contribute towards schemes including provident fund and gratuity for the worker. Self-employed persons, including agricultural labourers, will also make contribution towards the schemes on their own.
Significantly, casual, part-time or self-employed workers earning less than the stipulated minimum wages will not have to pay any contribution towards the social security schemes but will be entitled to these benefits through a fund set up by the government, according to another proposal.
The existing social security schemes have a limited reach due to application of thresholds based on income and number of workers in a factory. For instance, the provident fund and pension contribution, administered by the Employees’ Provident Fund Organisation (EPFO), is mandatory only for factories employing at least 20 workers.
“We feel that only a rights-based approach can lead the reform process to achieve universal social security cover for the workforce,” a top labour ministry official said. “The draft code clearly states the entitlement of beneficiaries to benefits and any denial of the same would justify recourse to legal remedies. It will become a right for the claimant as it will be enforceable by law,” the official said.
Various researches have pointed out significant flaws in the present social security framework of the country. The International Social Security Association (ISSA) in its ‘Social Security Coverage Extension in the BRICS’ report said that the best way to describe the social security coverage in India “is a patchwork” as there was a “total mismatch between the labour market realities and the history of social security laws.”
“Despite attempts over several years by Central and State governments to extend social security coverage to marginalised groups of workers, the current state of affairs is still wholly unsatisfactory, as revealed by evidence-based research,” according to a report titled, ‘Social Security Reform in India’ submitted by Professor Marius Olivier to the International Labour Organisation in May 2016. It noted that only 1% of the agricultural workers have reportedly been provided social security cover, even as close to all the casual workers are deprived of any benefits and socially or economically deprived people had much less coverage than the others. It also said that wage workers in the unorganised sector too had close to no social security benefit.
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