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Resource centre on India's rural distress
 
 

India needs to do more in social security space

The effect of labour-oriented schemes like MGNREGS and health insurance cover for 300 million people are yet to be captured, says U.N's labour organisation's report

India has performed poorly in providing social security protection to its people until recently with “very high vulnerability” to poverty and informal labour practices in the world, according to the International Labour Organisation.

In its first comprehensive ‘World Social Security Report’, which was released yesterday, the ILO has suggested that India has not done enough in the arena of social security protection, which is reckoned as the “human face of globalisation, in line with its fiscal status“.

The social security programmes include proper health care, pensions, social assistance and unemployment benefits.

In India, much of these benefits are extremely limited with a large majority of population ineligible for these benefits.

“Clearly, this is one side of the coin where India performed below its capacity in coverage and expenditure for broad social security measures until recently,” said Krzysztof Hagemejer, one of the authors of the report.

“But the other side of the coin is that there are new schemes such as national employment guarantee scheme and the health scheme for 300 million people and their effects yet to be captured,” he said.

Both China and India which have now become the global hub for production of goods and services respectively have not paid much attention to social security protection measures because of their increased preoccupation with “Washington Consensus” that emphasised growth without redistribution, said Michael Cichon, director of ILO Social Security Department.

“There is considerable change in these two countries in the recent period,” he argued.

Historically, social security measures played an important role in western countries and they reduced the degree of pain during serious economic crises.

It is now estimated that only about 20 per cent of the world’s working age population and their families have effective access to comprehensive social protection systems.

Only, 17.2 per cent per cent of global GDP is allocated to social security and these expenditures are concentrated in higher-income countries.

Further, 40 per cent of the population of working age is legally covered by contributory old-age pension schemes with Asian counties having only a 20 per cent share.

More disturbingly, less than 20 per cent of the elderly people receive pension benefits in India and elsewhere as compared to 75 per cent of people aged 65 or over receive some kind of pension.