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NAC releases draft on social security-Anuja and Remya Nair

The Sonia Gandhi-led National Advisory Council (NAC) has released draft recommendations for a social security package for the country’s unorganized sector, which envisages providing life, disability and health cover, maternity benefits and old-age pension to workers.

NAC, in a draft released on 7 March, suggested that the different welfare schemes being run by the ministries of women and child development, health and family welfare, finance and labour and employment should be cleared by a single agency. This is aimed at linking existing and new schemes for the unorganized sector.

The informal sector constitutes almost 93% of India’s workforce and accounts for around 60% of the country’s gross domestic product (GDP), according to official data.

The draft suggests setting up a national inter-ministerial panel to coordinate between the different ministries. It also proposes the creation of a national social security authority to design and develop a minimum social security package.

NAC has sought comments from the public on the draft. Once finalized, it will be sent for approval to the government.

NAC is holding consultations with the different ministries on the feasibility of a single-widow clearance for social security schemes, Mint reported on 17 February.

While the women and child welfare department runs the Indira Gandhi Matritva Sahyog Yojana, a conditional maternity benefit scheme, the labour ministry implements the Rashtriya Swasthya Bima Yojana (RSBY), the government’s health insurance plan for the poor.

The finance ministry is also finalizing an insurance plan with disability, life and pension benefits, into which both the state and the central governments will contribute. NAC estimates a minimum cost of Rs.43,000 crore a year if this plan is implemented among 430 million workers in the unorganized sector. To cut costs, NAC has proposed the scheme be offered to women first.

To achieve universal health coverage, NAC has suggested RSBY be extended to all workers in the unorganized sector and then be merged into a national health entitlement plan, which will guarantee free access to healthcare.

“It is good the government is thinking about these social security schemes, but the macroeconomic implications of these programmes on inflation and fiscal deficit cannot be forgotten,” said S.L. Rao, Bangalore-based sociologist and former director general of the National Council for Applied Economic Research. “Sadly, the government has, for years, showed no signs of cutting down on its expenditure; and in the current political situation, it only looks more difficult.” The state governments may be unwilling to contribute their share of funds, Rao added.

The Unorganised Sector Workers’ Social Security Act, 2008, covers the segment through the various schemes run by the central and the state governments. But with a majority of the informal sector workers still outside the social security net, a working group of NAC was set up to make implementation of the law more effective.