Analysing the Social security code 2020 for Informal Workforce

Synopsis: Critical analysis of the social security code 2020  reveals that it is short of providing universal social security for informal workers.

Background

• Informal workers constitute 91% of the workforce. The Pandemic had pushed them into severe poverty and debt burden due to loss of livelihoods.
• Social security arrangements could have saved them from the misery. Such as
  • Free basic curative care in public clinics and hospitals,
  • The elderly had old-age pensions,
  • Disability insurance or life insurance,
  • Minimum income guarantee
• However, an unprepared government had made them helpless.
• Even the social security code 2020 passed in parliament in September 2020 is short of providing universal social security for informal workers.

What are the Issues in Social security code 2020?

1. First, it is just a merger of existing social security laws and does little to provide universal social security for informal workers.
   • The SS Code 2020 amalgamates and rationalizes the provisions of eight existing central labour laws.
   • Even in the new scheme the employee’s provident fund, employees state insurance (ESI), maternity benefit, gratuity still remain only for organised sector workers.
   • Only a subtle change has been done to include informal workers within the ambit of social security administration. For example,
     • In employees’ state insurance, the existing employee threshold has been withdrawn. Now the central government can extend ESI benefits to any organisation irrespective of the number of workers employed.
2. Second, the SS 2020 scheme takes little consideration to solve the existing hurdles for informal workers in accessing Social security schemes. For instance,
   • The legal framework, as proposed in the Code and Rules, implies that the basic onus lies on informal workers registering as beneficiaries. It makes registration a prerequisite for universal coverage to avail social security.
   • However, it has failed to understand the underlying problem faced by the informal workers while making registration.
     • One, most informal workers lack digital literacy and connectivity. Hence, providing them the option for Online registration will make the Social security scheme a failure.
     • Two, most informal workers are footloose casual workers (26% of all workers) and self-employed (46% of all). This makes it difficult for them to furnish all documentary papers required as part of the registration process.
     • Further, furnishing proof of livelihood and income details in the absence of tangible employer-employee relations is also very difficult.
     • Three, Similar provisions are already there in existing social security schemes run by State governments under the Unorganized Workers’ Social Security Act, 2008.
     • Yet, many informal workers are outside the ambit of any social security because of the failure to address their concerns.
   • Third, unorganised workers are spread across the length and breadth of India. However, the code does not address the need for inter-State arrangements and cooperation for providing social security net.
   • Fourth, Under the SS Code, the provision of maternity benefits has not been made universal. Maternity benefit is presently applicable for establishments employing 10 workers or more. The definition of ‘Establishment’ in the proposed code did not include the unorganised sector. Hence, women engaged in the unorganised sector would remain outside the purview of maternity benefit.
   • Fifth, The SS Code maintains that the Employees’ Provident Fund Scheme will remain applicable, as before, to every establishment in which 20 or more employees are employed.
   • Thus, for informal sector workers, access to employees’ provident fund remains unfulfilled in the new code.
   • Sixth, although payment of gratuity was expanded in the new Code, it still remains inaccessible for a vast majority of informal workers.

The code fails to recognise that India is ageing without social security. The demographic dividend of the young workforce that could support the ageing will also end in 15 years. Hence, it’s a priority for India to institutionalize a Universal social security arrangement for all including the informal workforce by removing the above-mentioned challenges.

Source: The Hindu