Needed, a well-crafted social security net for all

Source: The post is based on articles “Needed, a well-crafted social security net for all” published in The Hindu on 24^th August 2023.

Syllabus: GS 2 – Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Relevance: concerns with social security schemes in India.

News: Social security in India has largely been ignored by the policymakers. The article explains the measures needed to enhance social security schemes in India.

What are the various findings of the data?

As per the Periodic Labour Force Survey Annual Report 2021-22, around 53% of India’s salaried workforce lacks social security benefits.

Further, only 1.9% of the poorest 20% of workers enjoy any such social security benefits. Similarly, only around 1.3% of active labor force members, who are gig workers, have access to social security.

India’s social security system is ranked very poorly, securing the 40th position out of 43 countries in Mercer CFS’s 2021 ranking.

What are the concerns with the existing social security benefits schemes?

The National Social Security Fund for unorganized sector workers began with ₹1,000 crore, intended for workers like weavers and rickshaw pullers.

However, this was insufficient compared to the required ₹22,841 crore. Additionally, an audit by the CAG found ₹1,927 crore unutilized.

Similarly, the National Social Assistance Programme aimed to provide a ₹75 monthly pension to elderly individuals without earners at home.

However, the Centre’s contribution has remained at ₹200 monthly since 2006, lower than the daily minimum wage.

Moreover, budget cuts have also impacted the implementation of the Mahatma Gandhi National Rural Employment Guarantee Act along with other schemes.

How is the social security scheme in Brazil?

Brazil’s General Social Security Scheme offers income for workers facing income loss from accidents, disabilities, death, medical leave, family duties, unemployment, or imprisonment. Accessing benefits is easier in Brazil.

India, with around 91% of its workforce in the informal sector, also needs an accessible social security scheme like Brazil’s due to this large informal workforce.

Must Read: Social security and the story of two Budgets

What steps can be taken by India to enhance its social security schemes?

First, expanding employer and employee contributions within the Employees’ Provident Fund Organisation (EPFO) system for formal workers.

Second, informal workers who earn a decent income could contribute a part of their earnings. This could motivate informal businesses to become more official and contribute more as well.

Third, Code on Social Security in 2020 and e-Shram platform are important measures taken for social security. However, e-Shram makes informal workers register themselves, without motivating employers to encourage registration.

The Code on Social Security (2020) consolidated existing social security laws, primarily focusing on formal enterprises and did not cover informal ones.

Fourth, there is a need to fund social security for India’s large workforce, beyond just construction and gig workers.

This includes a nationwide labor card and expanding successful schemes to other types of workers. Special attention is also required for females and migrant workers.

Fifth, Existing schemes like the Employees’ Provident Fund (EPF), Employees’ State Insurance Scheme (ESI), and National Social Assistance Programme (NSAP) could be strengthened by increasing budgetary support and extending coverage.

Administrative enhancements are also needed due to overlapping responsibilities between the State and Centre.

Sixth, there is a need to raise awareness about social security benefits among workers. Organizations like the Self-Employed Women’s Association, running worker facilitation centers, could receive funding to carry out campaigns, particularly for women.