Needed, a well-crafted social security net for all

India’s social security system:

1. Periodic Labour Force Survey Annual Report 2021-22:
   1. About 53% of all of the salaried workforce does not have any social security benefits in India.
   2. They have no access to a provident fund (PF), pension, and health care and disability insurance.
   3. Only 1.9% of the poorest 20% of India’s workforce has access to any benefits.
   4. 1.3% of India’s active labour force or gig workers, rarely have access to any social security benefit.
2. Mercer CFS ranked India at 40 out of 43 countries in 2021, indicating poor ranking of the India’s social security system.
3. About 91% (or around 475 million) of India’s workforce works in the informal sector which lacks access to social security.
4. Given that India will become an aging society within two decades, for such workers with limited savings, there will be no significant social protection.
5. The Code on Social Security (2020) which has been merged with existing social security legislation, it has fundamentally dealt with formal enterprises and has not covered informal ones.

Issues with India’s social security coverage:

1. Limited budgetary allocation.
   1. In FY11, the National Social Security Fund was set up for unorganised sector workers with outlay of only ₹1,000 crore, while the actual requirement was projected at ₹22,841 crore by the Centre for Budget and Governance Accountability.
   2. The contribution by the Centre to old-age pension schemes has stagnated at ₹200 a month since 2006 which is much below the minimum wage per day.
   3. The Budgetary allotments to the Mahatma Gandhi National Rural Employment Guarantee Act have been on the declining trend or stagnated in spite of increasing demand for work.

2. Under-utilisation of existing funds:
   1. The CAG has identified that the cess collected for the purpose of social security to construction workers in Delhi has been highly under-utilised (~94% of the money was not utilised).
3. Poor targeting of Beneficiaries:
   1. CAG has found that direct benefit (DBT) scheme of the State’s Social Justice and Empowerment Department had made transfers of ₹ 98.96 Cr. to the accounts of deceased beneficiaries.

Steps to be taken by India:

1. Takeaway from schemes overseas- Brazil’s General Social Security Scheme:
   1. It is contribution-based in nature substituting income loss for a worker (and his family), both in partial or full.
   2. Covers almost all kind of situations that includes
      1. Accident at work
      2. A disability that prevents the worker from working, death,
      3. An illness/medical treatment that leads to time away from work
      4. Family burdens
      5. Prospect of unemployment.
      6. Income loss even due to imprisonment
   3. Unemployment insurance is paid from worker support funds while health care is covered through the Unified Health System.
   4. Hassle-free availing of social security benefits without the need of endless documents.
2. Adoption of a fiscally and administratively feasible social security to all of its workforce:
   1. Expansion of employer and employee contribution under the Employees’ Provident Fund Organisation (EPFO) system for formal workers.
   2.  For informal workers with meaningful income whether self-employed or in an informal enterprise,
      1. Partial contributions can be initiated
      2. Informal enterprises need to be persuaded to formalise and expand their total contribution.
3. The government should provide social protection to the poorest 20% of the workforce who are unemployed or have stopped looking for work, or do not earn enough.
4. Other reforms required:
   1. e-Shram platform which has enabled the enrolment of approximately 300 million workers, puts the burden of registration on informal workers by requiring them to furnish essential documents. The employer (even temporary) needs to be given enough incentive to foster registration for formalisation of employee-employer relationships.
   2. A push for a pan-India labour force card shall expand the ambit of social security benefits beyond construction and gig workers. 
   3. Existing successful schemes such as the Building and Other Construction Workers Schemes needs to be expanded to other categories of workers.
   4. Special attention is required for
      1. Domestic workers (usually female) who are unsure of their employment.
      2. Migrant workers often face discrimination and suspicion from authorities.
   5. Expansion of budgetary support and coverage of existing schemes like
      1. Employees’ Provident Fund (EPF)
      2. The Employees’ State Insurance Scheme (ESI)
      3. The National Social Assistance Programme (NSAP)