The government has proposed a comprehensive system to provide social security for roughly 22% of the 475 million-strong Indian workforce by 2019. More than 100 million workers, including farmers and manual labourers will benefit from the new universal scheme being drawn up by the labour ministry, based on the 2012 Suresh Tendulkar Committee poverty-line report.
What we know so far about the proposed system
To start things off, the centre aims to provide retirement pension, medical insurance, and death and disability benefits to ensure social security for workers. Unemployment and maternity benefits are soon to follow.
Official sources told ET that arriving at the number of beneficiaries was the first task. A ministry-appointed committee, led by Jawaharlal Nehru University professor Santosh Mehrotra, will be identifying those who need social security cover most urgently. “This would give us an estimated quantum of funds required to roll out the scheme,” an official added.
The first 50 crore beneficiaries will be classified into four segments: people below the poverty line who cannot contribute for their security, workers in the unorganised sector who have some contributory power but cannot be self-sufficient, those who can contribute to the schemes either by themselves or jointly with their employers, and affluent people who can provide for their contingencies. For those identified under these categories, the government aims to sponsor all expenses with the help of subsidised tax-based schemes.
Looking back at recent pro-labour policies
For a country that is ranked as the sixth wealthiest economy in the world, the minimum wage for semi- or unskilled labourers is still at an abysmal low. “Less than 4% of workers inIndiacome under labour protection, and even those protections have become more and more eroded. There’s a general sense that instead of targeting poverty they are targeting the poor,” Professor Jayati Ghosh, a development economist at JNU, had cribbed in 2016. It was around this time that the massive worker’s strike swept India’s labour market, which took a heavy beating under Prime Minister Narendra Modi’s neoliberal policies.
Earlier this year, right before the Union Budget, the centre mandated fixed-term labour contracts for workers employed in short-term assignments. Under fixed-term employment, they will be entitled to the same statutory benefits available to a permanent worker in the same factory, including work hours, wages, and allowances. But it also gives employers the power to terminate contracts without notice.
The 2018 Budget aimed to provide a fillip to the agriculture sector with the promise to raise the minimum selling price of their produce. Again, this promise remained largely unfulfilled and paved the way for one of the largest countrywide farmer protests in April. The number of manual scavengers has increased manifold ever since Modi’s Swachh Bharat campaign took off.
Why this scheme could be pivotal
Ambivalent and insincere moves like these have disillusioned India’s working class against the government. Opposition leaders accuse the ruling party of harbouring the best interests of corporations, rather than adopting pro-worker strategies.
Social security is an ubiquitous federal insurance scheme in most developed economies. The centre’s latest step towards achieving a comprehensive system for India’s workforce by 2019 is a bellwether for economic and social development and could prove instrumental to the BJP in the run-up to Lok Sabha elections.