Date : 24/08/2023

Relevance: GS Paper 2 - Social Justice - Social security

Keywords: PLFS 2021, Old Age Security, Code on Social Security 2020, CAG

Context-

There is an urgent need for a robust social security system that encompasses all segments of India's workforce. With disheartening statistics revealing that a significant portion of the workforce lacks social security benefits, emphasizing the necessity of rectifying this gap to ensure a fair and secure society.

What is Social Security?

Social security in India refers to a set of measures and programmes designed to provide protection to individuals and families against various risks and vulnerabilities. These risks and vulnerabilities can include old age, disability, illness, unemployment, and poverty.

What are the various Indian Government Initiatives Regarding Social Security?

• Pradhan Mantri Shram Yogi Maan-Dhan Yojana (PM-SYM).
• National Pension Scheme for Traders and The Self-employed Persons (NPS).
• Pradhan Mantri Jeevan Jyoti Yojana (PMJJBY).
• Pradhan Mantri Suraksha Bima Yojana (PMSBY).
• Atal Pension Yojana.
• National Safai Karamcharis Finance and Development Corporation (NSKFDC).
• Self Employment Scheme for Rehabilitation of Manual Scavengers.

Current State of Social Security

Various reports draw attention to the grim reality wherein approximately 53% of the salaried workforce in India remains devoid of essential social security benefits, as reported by the Periodic Labour Force Survey Annual Report 2021-22. This alarming situation translates to a lack of access to crucial provisions like provident funds, pensions, and healthcare and disability insurance. Disturbingly, merely 1.9% of the poorest quintile within the workforce enjoys any form of benefits, accentuating the stark inequality prevalent in the system. Even gig workers, constituting around 1.3% of the labour force, remain largely excluded from social security coverage. International rankings also depict the poor state of India's social security, with Mercer CFS ranking it at a low 40 out of 43 countries in 2021.

Historical Neglect and Misallocation of Resources

Report criticizes the lack of attention from policymakers towards the establishment of a comprehensive social security framework. Despite sporadic policy announcements, the allocated budgets have consistently fallen short, and the actual utilization has been even more inadequate. The establishment of the National Social Security Fund in FY11 exemplifies this, with an initial allocation far below the actual requirements. Audit reports, such as one by the Comptroller and Auditor General of India (CAG) in FY17, unveil the startling fact that significant amounts earmarked for social security have remained unutilized, rendering several schemes ineffectual.

International Comparisons: A Glimpse of Possibilities

Various Reports juxtapose India's situation with Brazil's General Social Security Scheme, highlighting its success in providing contribution-based coverage to workers and their families against various contingencies. Brazil's comprehensive approach encompasses accidents, disabilities, illnesses, family burdens, and even imprisonment-related income loss. He underscores the importance of adopting successful international models while adapting them to India's unique context.

Challenges and Opportunities

Emphasizing the dominance of the informal sector, where approximately 91% of India's workforce operates, it underscores the urgency to provide social security to this vast segment. Acknowledging that India is moving toward an aging society, he asserts that without adequate social protection, workers with limited savings will face dire circumstances in the future. It highlights the Code on Social Security (2020) as a step in the right direction, but notes that its focus remains predominantly on formal enterprises, leaving the informal sector largely untouched.

Proposed Steps for Comprehensive Social Security

It proposes a multi-pronged strategy to achieve universal social security coverage, focusing on formal and informal workers alike. It suggests expanding contributions under the Employees' Provident Fund Organisation (EPFO) for formal workers and eliciting partial contributions from informal workers with substantial income. Encouraging informal enterprises to formalize their operations and contribute to social security is another vital aspect. For those who are unemployed, government intervention is essential. It is estimated that the cost of providing social protection to the poorest 20% of the workforce at ₹1.37 trillion, equivalent to around 0.69% of GDP in FY20.

Enhancing Existing Systems and Reforms

It praises the efforts made so far, such as the Code on Social Security (2020), which intends to extend coverage to various worker categories. However, It points out limitations in the implementation, particularly placing the registration burden on informal workers rather than engaging employers. It suggests involving employers to foster formalization and make social security entitlements mandatory. It also calls for financial support to extend coverage beyond construction and gig workers, mentioning a pan-India labour force card and an expansion of successful schemes like the Building and Other Construction Workers Schemes.

Inclusive Approach for Vulnerable Workers

It underscores the significance of addressing the unique challenges faced by domestic and migrant workers. Domestic workers, often female, need protection against sudden terminations, while migrant workers require expanded access to social services in unfamiliar areas.

Revamping Existing Schemes and Raising Awareness

It advocates strengthening schemes like the Employees' Provident Fund (EPF), Employees' State Insurance Scheme (ESI), and the National Social Assistance Programme (NSAP) through budgetary support and broader coverage. Administrative streamlining is also crucial, highlighting the need to simplify definitions and eliminate overlapping areas of authority.

Promoting Awareness and Empowerment

In the pursuit of a comprehensive social security net, the article underscores the necessity of awareness campaigns. Organizations like the Self-Employed Women's Association could play a crucial role in disseminating information and promoting social security rights, especially among women.

Conclusion

It concludes by stressing the urgency of consolidating India's social security measures and extending universal coverage to the entire workforce. It emphasizes the importance of discarding outdated ideologies and embracing policies that facilitate inclusive and equitable growth. By establishing a comprehensive social security net, India can ensure that the benefits of progress are shared by all, and workers can find stability and security in an evolving job landscape.

Source - The Hindu