The Labour Ministry has mooted the idea of forming a National Social Security Authority, chaired by Prime Minister Narendra Modi, and a separate Social Security Department within the ministry to provide social security to the entire population.
What do we mean by Social security?
• Social security is a program in which the government provides money to people who are unable to work because they are old, disabled, or unemployed. It is funded usually by mandatory payroll contribution from both the employees and the employer and from the government tax revenue.
Why do India require social security authority?
• Social security is still an underdeveloped concept for a country where at least 30% of the population continues to live in poverty and where old age is often accompanied by extreme destitution for many.
• The current social sector program covers only a small portion of the population and is primarily employer driven, limiting its scope to help the vast majority of people.
• Around 50% of Indians work in Agriculture sector where they enjoy no social security. Around 92% of India's urban workforce are employed in informal sector and though number of schemes like RSBY,Atal Pension Yojana have been launched for them there impact on granting true social security to the Workers is still found to be not adequate.
Key Features of Proposed National Social Security Authority
• The authority may have all the ministers and secretaries of all ministries dealing with social security programmes along with state government officials as members. It will be headed by The Prime minister
• The functions of the authority would be mainly to formulate the National Policy on Social Security and to co-ordinate the central and state level programmes and to ensure that the objectives of the policy are achieved within the time frame prescribed.
• The proposed Social Security Department within the Labour Ministry will provide “policy inputs” and “secretarial services” to the body.
• The Ministry note proposes a 4 tier system to cover the entire population of the country, including both formal and informal sector workers, through a common Social Security Code.
• The 1st tier would include the “destitute and people below the poverty line,” the second tier would have workers in the unorganized sector who may be covered under a subsidized scheme and the 3rd tier would cover workers who can, with the help of employer, can make contribution to the schemes.
• The 4th tier would include people who are comparatively affluent and can make their own provisions for meeting contingencies or risks as and when arise
• The note “visualized” that the social assistance programmes for the first tier shall be based on tax revenue.
Schemes Launched by Government in Recent Years to Improve Social Security
(A) The Pradhan Mantri Suraksha Bima Yojana
• The Pradhan Mantri Suraksha Bima Yojana (PMSBY - Scheme 1 - for Accidental Death Insurance) offers accidental death cover for all applicants for a year starting from June 1, 2015 to May 31, 2016. The total coverage, or sum insured, under the scheme is Rs 2,00,000 for death and Rs 100,000 for partial disability. The premium for the scheme is fixed at Rs. 12 per annum making it one of the cheapest accidental insurance schemes in the world. With just Rs. 1 per month, every Indian citizen within the age group 18-70 years can now have an accidental death and disability insurance. The premium can be deducted from your savings bank account through an auto debit facility.
(B) The Pradhan Mantri Jeevan Jyoti Bima Yojana
• The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY -- Scheme 2 -- For Life Insurance Cover) is available for people within the age group 18-50 years.
• With a premium payment of just Rs. 330 per year, which can be auto-debited from your account, one can get a life cover of Rs. 200,000 for death occurring out of any reason.
• If you are joining the scheme before completing 50 years, the coverage can be extended up to the age of 55 years subject to payment of premium.
(C) Atal Pension Yojana
• Atal Pension Yojana Scheme was introduced by Government of India in the year 2015-16. Main aim of starting this Pension Yojana Scheme was to provide income security to society in the old age.This scheme replaced the earlier swavalmaban scheme of the UPA government.
(D) RSBY (Rashtriya Swasthya Bima Yojana)
• RSBY is a health insurance scheme for below poverty line families. It was launched for workers in the unorganised sector during the 2007-2008 fiscal policy.
• This scheme provides for IT enabled and smart card bases chastens health insurance including maternity benefit of close to INR 30,000 per annum on a family floater basis to BPL families and 11 occupational groups in the organised sector .
• The Unorganised Workers Social Security Act 2008 has come info force w.e.f 31st December 2008 and it covers 10 social security schemes benefiting workers in the unorganised sector including RSBY.
• RSBY provides BPL families with freedom to choose between public and private hospitals.
(E) National social security programme
• The National Social Assistance Programme (NSAP) is a welfare programme being administered by the Ministry of Rural Development. This programme is being implemented in rural areas as well as urban areas.
• The programme was 1st launched on 15th August 1995 as a Centrally Sponsored Scheme comprising the National Old Age Pension Scheme (NOAPS), National Family Benefit Scheme (NFBS) and National Maternity Benefit Scheme (NMBS).
• Presently NSAP now comprises of the following five schemes:-
• Indira Gandhi National Old Age Pension Scheme (IGNOAPS): All persons of 60 years (and above) and belonging to below the poverty line category according to the criteria prescribed by the Government of India time to time, are eligible to be a beneficiary of the scheme. The pension amount at present is 400 per person per month per person for age group 60 to 79 years and Rs. 500 per person from age group 80 and above. The states are supposed to contribute an equal amount vis-a-vis the scheme
• Indira Gandhi National Widow Pension Scheme (IGNWPS): BPL widows aged 40-59 years are entitled to a monthly pension of Rs. 300/-.
• Indira Gandhi National Disability Pension Scheme (IGNDPS): BPL persons aged 18-59 years with severe and multiple disabilities are entitled to a monthly pension of Rs. 300/-.
• National Family Benefit Scheme (NFBS): Under the scheme a BPL household is entitled to lump sum amount of money on the death of primary breadwinner aged between 18 and 64 years. The amount of assistance is Rs. 20.000/-. Annapurna: Under the scheme, 10 kg of food grains per month are provided free of cost to those senior citizens who, though eligible, have remained uncovered under NOAPS.
• Annapurna: Under the scheme, 10 kg of food grains per month are provided free of cost to those senior citizens who, though eligible, have remained uncovered under NOAPS.
• The Employees' Provident Fund Organisation (EPFO) is a statutory body under the Ministry of Labour and Employment that administers social security regulations.
• The EPFO covers pensions and survivors' benefits in the event of an employee's death. It is compulsory for all workers employed by companies with more than 20 staff. Employers must apply for the fund on behalf of their workers.
• Since October 2008, all foreigners employed in India have been subject to the terms of the EPFO under the category of “international workers”.
• The employee is required to contribute 12% of their salary to the EPFO, which is automatically deducted by the employer. Employers must match this 12% contribution. Employers are legally required to deduct these contributions and remit them to the EPFO.
• Tax-free interest is earned on contributions made to the fund at a specified rate, which is updated regularly by the government. For 2012-13, the rate is 8.8%.
Issues with present Social security schemes in India
• Instead of launching so many schemes on social security the numbers of Indians who are covered or benefitted from these schemes are very less. The situation is much worse in unorganized sector .The are various reasons why current social security framework in India failed to achieve desired results. The International Labour Organization's World Social Protection Report 2014-15 shows less than a fourth of India's population above the statutory pensionable age receives any kind of pension. Most of our social security schemes face weak beneficiary selection criteria, age old storage infrastructure, ineffective implementation and wide scale corruption
• Fragmented ownership structure and lack of coordination-Most of the pension or insurance schemes in India are run by different ministries and they follow a silo approach. There is hardly any coordination among ministries. This adversely effects the implementation of the schemes.
• Low monetary benefits-The amount provided by government under the current social security schemes do not in reality provide any real social security to people since it is too low for sustenance. Under the Indira Gandhi Old Age Pension Scheme and Widow Pension Scheme, the Central government contributes only Rs. 200 and Rs. 300 per month respectively. Even under ATAL Pension Yojana the maximum amount one can get under it is RS 5000 per month and that too after 20 years when practically RS 5000 would mean nothing.
• Low expenditure- India spends 1.4% of its GDP on social protection, among the lowest in Asia, far lower than China, Sri Lanka, Thailand, and even Nepal.
India needs to have an umbrella for social security schemes to check duplication of benefits for some beneficiaries while a section of people is left out of it. NSSA will help to rectify this problem since it will have all the ministers and secretaries of all ministries dealing with social security programmes along with state government officials as its members and it would also coordinate different schemes and programmes launched by centre and states on social security leading to lack of duplication.