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LATEST NEWS UPDATES | Modi government plans universal social security for workers -Arindam Majumder

Modi government plans universal social security for workers -Arindam Majumder

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published Published on Oct 16, 2016   modified Modified on Oct 16, 2016
-Business Standard


Scheme to benefit close to 450 million workers, mainly in the unorganised sector

 Stung by repeated resistance from trade unions and strikes, the Narendra Modi government plans to launch a massive social security coverage scheme which will benefit almost 450 million workers, mainly in the unorganised sector.

In order to achieve this, the government will attempt to create a corpus through which the benefits will be provided. The benefits include all the branches under the International Labour Organisation Social Security Convention 1952 (No 102).

Under convention 102,  benefits includes preventive and general practitioner care, sickness benefit, unemployment benefit, old-age benefit, employment injury benefit, family benefit, maternity benefit, invalidity benefit and survivors benefit.

This is part of the code on social security which will see nearly a dozen laws related to the subject merged into a single law or code.

Officials in the labour and employment ministry told Business Standard, as a part of this pilot process, the final guidelines of which are currently being framed, the government will identify a threshold income beyond which citizens have to pay for the benefits.

The workforce will be divided into three parts – a section who will pay for the benefit, the second who can partially pay for them and the third layer for whom the government will pay. "Through the subscription of the first two sections, we will create a corpus which will take care of the schemes," a senior labour ministry official, who is part of the team forming the code, said.

The labour ministry as of now handles the corpus of Employee Provident Fund and Employee State Insurance Corporation, which is formed from subscription of members.

"We want to ensure universal social security for both formal and informal sector in the country, the direction from the prime minister’s office is that every willing worker should be ensured benefit of the schemes, one who can pay for it will do so," a senior labour ministry official said.

The idea behind a universal social security coverage by the labour ministry stems from a report by National Commission for Enterprises in Unorganised Sector in 2007 which pointed out the dismal nature of social security in India.

The report revealed that only eight per cent of India’s total workforce enjoys social security and a massive 91 per cent are in the informal sector. The commission also noted that even the increase of employment in the formal sector has largely been informal in nature, which means the worker, despite being in the formal sector, does not enjoy benefits that should accrue to formal sector.

A second ministry official said that identification of the target workforce is a major hurdle and the ministry plans to use Aadhaar numbers and Aadhaar-linked Unorganised Workers’ Identification Number cards to ensure that all the social security benefits reach to the persons aimed at.

"There have been instructions that as the ministry undertakes reforms to increase ease of doing business, it should simultaneously increase workers benefits," the official said, adding, "That is the way forward." The Modi government has been forced to go slow on many proposed labour reforms as it faced stiff opposition from labour unions, including the Bharatiya Mazdoor Sangh which owes allegiance to the Rashtriya Swayamsevak Sangh.
 
Unorganized labour

Business Standard, 16 October, 2016, http://www.business-standard.com/article/economy-policy/modi-government-plans-universal-social-security-for-workers-116101600210_1.html


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