Centre Proposes Social Security System; Benefits To Be Rolled Out In Phases

India is one step close to providing social security to its people. The government plans to launch Rs 2 lakh crore-worth of security in three phases, a move that will benefit about 50 crore people in the country. The proposal has already received a go ahead from the Prime Minister’s Office, and the labour ministry has taken it up for consideration.

Who is benefitting?

Classified into four tiers, there are 500 million beneficiaries altogether. The scheme will reach the bottom 40 per cent in the first phase. This comprises of those in the agricultural sector, and those living below the poverty line. The benefits offered would include retirement, health, old-age, disability, unemployment and maternity benefits. However, these would be carried out in phases only. In the first phase, beneficiaries are entitled to health, retirement benefits only. Unemployment benefits would be introduced at a later stage.

The second tier of beneficiaries includes those in the unorganised sector. This section may have some contributory power in the plan of things. The third tier comprises of those who can pool in resources jointly with their employers to make themselves self-sufficient. The fourth tier comprises of those who are affluent and can manage on their own.

The schedule

The scheme will roll out gradually and will benefit the weaker classes and over a period of five to 10 years. From thereon, it would become a universal scheme.

Not the first of its kind

In the Union Budget 2018, Finance Minister Arun Jaitley had introduced the Rs 5 lakh-worth health cover for the poorest people. This new scheme is, therefore, the second of the mass social security schemes.

The organised service class in India is already benefitted by social security schemes such as The Employees’ Provident Fund Scheme, 1952; The Employees’ Pension Scheme, 1995; and, The Employees’ Deposit Linked Insurance Scheme, 1976. There are also pensions upon superannuation or disability, widows’ pension, children's’ pension and orphan’s pension.

Besides, there are health insurances, medical benefits, disability benefit, maternity benefit and gratuity in place. By and large, it is the organised sectors that benefit. However, with this social security system in place, India can expect a better future although the entire task is time-taking.

What the critics say

R Geetha of the Federation of the Unorganised Workers says that social security may not be effective unless the government regulates the wages of those working in the unorganised sector.

A national daily quoted her as saying: “Models have to be different for organised and unorganised sectors since there is no direct relation between employers and workers in the unorganised sector. Hence, regulation of employment has to be combined with social security for unorganised sector workers through sectoral Tripartite Boards.”

The beginnings

The draft Labour Code on Social Security 2018 has been brought out by the Union Labour and Employment Ministry. As per the provisions, all organised and those working in the unorganised sectors would be registered. As per sources, the scope of this Code would now expand over 10 times and a decentralised structure has been proposed as against the format of Employee Provident Fund and Employees State Insurance Corporation.

In March, the Punjab Assembly had passed the Punjab Social Security Bill 2018. The Bill makes provision for social security surcharges of up to Rs 2 on petrol and diesel, 1 per cent on registration of vehicles, 10 per cent on transport vehicles, 5 per cent on electricity bills and 10 per cent on excise duty. A consolidated fund created would be utilised to fund health insurances, pensions and scholarship schemes.