Context

The government proposes to bring at least half a dozen social security schemes, including old age pension and insurance, under the ambit of the proposed social security code.

About

• The move is aimed at universalisation by bringing all existing schemes under one umbrella without any additional cost to the exchequer and is expected to cover more than 20% of the bottom of the population.
• The labour ministry will shortly finalise a list of the existing social security schemes that can be brought under the social security code once the code is approved by Parliament and notified.
• The move is aimed at consolidating millions of beneficiaries of the existing social security schemes under one administration for effective implementation and to avoid duplication.
• The schemes expected to immediately come under the code are the PM Shram Yogi Maandhan scheme, the PM Laghu Vyapari Maandhan Yojana and the Atal Pension Yojana.
• All these are voluntary contribution pension schemes in which contribution is made by the subscriber and matched by the Centre, making the beneficiary eligible for Rs 1,000-5,000 per month pension after attaining the age of 60.
• Schemes completely funded by the Centre such as the old-age pension scheme and the health insurance schemes, including the Pradhan Mantri Jeevan Jyoti Bima Yojana under which individuals contribute a miniscule amount year after year for availing health insurance, could be brought in next.
• Section 13 of the proposed social security code provides for bringing all existing social security schemes under the code through notification. Notwithstanding anything contained in this code, the central government may, by notification, assign additional functions to a social security organisation including administration of any other Act or scheme relating to social security subject to such provisions as may be specified in this behalf in the notification.

How effective are social security and welfare in India?

• India spends 1.4 percent of its GDP on social protection, among the lowest in Asia, far lower than China, Sri Lanka, Thailand, and even Nepal.
• India’s growth story of the last two decades has had one recurring theme: that the pattern of economic growth is accentuating insecurities. Yet, there continues to be a deep divide over whether the gains from growth ought to be ploughed back to achieve social security for everyone.
• Social security has come to be linked to job benefits, tying it to one’s status as a worker in the formal or the informal economy when, fundamentally, it originates from the notion of ensuring everyone protection against vulnerability and deprivation.
• Constitutional provision: In the Constitution, Article 41 of Directive Principles asks the state to “within the limits of its economic capacity and development,” make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want.” Article 42 says the state shall make provisions for securing just and humane conditions of work and for maternity benefits.
• Recognition of minimum social security cover: India does not yet explicitly recognise a national minimum social security cover. In recent years, including with an intervention by the Supreme Court in the Right to Food case, the government has moved forward to providing nutrition and employment support with a legal guarantee through the MGNREGA.
• Economists Amartya Sen and Jean Dreze distinguish two aspects of social security —“protection” and “promotion.” While the former denotes protection against a fall in living standards and living conditions through ill health, accidents, the latter focuses on enhanced living conditions, helping everyone overcome persistent capabilities deprivation.
• A close look at India’s record in providing social security shows that while only a fraction of citizens enjoy any “protection” at all, these are being further eroded with the current pattern of economic growth.
• The government launched the first pensions programme for the poor, the National Social Assistance Programme, starting with of a pension of Rs. 75 per month, in 1995. Under the Indira Gandhi Old Age Pension Scheme and Widow Pension Scheme, the Central government contributes Rs. 200 and Rs. 300 per month respectively. Several States, Himachal Pradesh, Rajasthan, and Bihar provide between Rs. 400-300 per month, while Tamil Nadu provides Rs. 1000 per month.
• Atal Pension Yojna was announced in Budget 2015-16 as an upgrade to the Swavalamban scheme, which folds into the new defined benefit pension scheme for the poor.

A universal social security

• The biggest gap, and one which may only widen, is in social protection for the working poor. The UPA government appointed the National Commission for Enterprises in the Unorganised Sector (NCEUS) in 2004 to look into livelihood conditions and social security for unorganised workers — employed in the unorganised sector and those in the formal sector without any social protection. It found that only those in the formal sector, 8 per cent of India’s workforce, enjoys social security. Over 91 percent of workers, over 39.5 crore workers, are in the informal sector.
• The Commission highlighted that there had been almost no growth in formal employment since early 1990s and almost all growth in employment was in the unorganised sector. NCEUS’ finding that 79 percent of workers in the unorganised sector lived on an income of less than Rs. 20 a day made it evident that the gains of growth were bypassing the majority of the working population.
• The NCEUS proposed legislation for a national minimum security package for unorganised sector workers, social insurance, social assistance for life and health cover, old age benefits to all workers within a period of five years financed by the Centre and state governments, employers (where identifiable) and workers at a cost of less than 0.5 percent of Gross Domestic Product after five years. The government discarded the Commission’s recommendations for statutory backing to social protection.

Conclusion:

Social Security in any country is to the interest of all other countries, since it contributes to political stability, economic well-being, and is the embodiment of belief in the innate dignity and worth of the common man. The introduction of this new section will make it easy for the government to consolidate all schemes under the proposed Social Security Organisation without having to go to Parliament for bringing all such schemes under one roof as they are currently being administered by different ministries including the finance ministry and the rural development ministry.