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    08 Rajasekhar Social Security in India

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    Lokesh Parashar
    This document provides an overview of India's social security system and the challenges faced in providing coverage to both organized and unorganized sector workers. It notes that while organized sector workers have reliable access to social security, the 93% of workers in the unorganized sector lack sufficient protections. It divides unorganized workers into ultra-poor, who require basic needs support, and upwardly mobile poor, who have the ability to contribute to social security programs. Key recommendations include moving towards universal social security financed through both contributions and taxes, promoting decentralized and integrated approaches, and strengthening institutions to better serve the ultra-poor while linking the upwardly mobile poor to private insurance. Major challenges remain in designing an inclusive system that provides both social security and poverty allev

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    08 Rajasekhar Social Security in India

    Uploaded by

    Lokesh Parashar
    54 views24 pages
    This document provides an overview of India's social security system and the challenges faced in providing coverage to both organized and unorganized sector workers. It notes that while organized sector workers have reliable access to social security, the 93% of workers in the unorganized sector lack sufficient protections. It divides unorganized workers into ultra-poor, who require basic needs support, and upwardly mobile poor, who have the ability to contribute to social security programs. Key recommendations include moving towards universal social security financed through both contributions and taxes, promoting decentralized and integrated approaches, and strengthening institutions to better serve the ultra-poor while linking the upwardly mobile poor to private insurance. Major challenges remain in designing an inclusive system that provides both social security and poverty allev

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    This document provides an overview of India's social security system and the challenges faced in providing coverage to both organized and unorganized sector workers. It notes that while organized sector workers have reliable access to social security, the 93% of workers in the unorganized sector lack sufficient protections. It divides unorganized workers into ultra-poor, who require basic needs support, and upwardly mobile poor, who have the ability to contribute to social security programs. Key recommendations include moving towards universal social security financed through both contributions and taxes, promoting decentralized and integrated approaches, and strengthening institutions to better serve the ultra-poor while linking the upwardly mobile poor to private insurance. Major challenges remain in designing an inclusive system that provides both social security and poverty allev

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    54 views24 pages

    08 Rajasekhar Social Security in India

    Uploaded by

    Lokesh Parashar
    This document provides an overview of India's social security system and the challenges faced in providing coverage to both organized and unorganized sector workers. It notes that while organized sector workers have reliable access to social security, the 93% of workers in the unorganized sector lack sufficient protections. It divides unorganized workers into ultra-poor, who require basic needs support, and upwardly mobile poor, who have the ability to contribute to social security programs. Key recommendations include moving towards universal social security financed through both contributions and taxes, promoting decentralized and integrated approaches, and strengthening institutions to better serve the ultra-poor while linking the upwardly mobile poor to private insurance. Major challenges remain in designing an inclusive system that provides both social security and poverty allev

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    SOCIAL SECURITY IN INDIA:

    STATUS, ISSUES AND WAYS


    FORWARD
    D Rajasekhar
    Centre for Decentralisation and Development,
    ISEC, Bangalore
    Presentation to the International Conference on Social Security Systems in Developing and Newly
    Industrialising Countries: Utopia or Strategy for Keeping Peace and Fighting Poverty, Germany,
    September 18-19, 2007

    Introduction
    

    
    

    Social security system in a large and


    diverse country like India is bound to be
    complex.
    It is, therefore, challenge to explain the
    system in the allotted time.
    Hence, only overview is provided.
    The presentation is non-technical.
    2

    Indian Workforce
    

    Around 400 million persons in India are in the


    working age group.
    Less than 7 per cent are organised or in the
    formal sector
    The unorganised or informal component is
    large.
    93% of the workers are unorganised.

    Organised sector workers


    

    
    

    Have sufficient and reliable access to social


    security.
    Have secure jobs and obtain price-adjusted salaries.
    Protected under the Law against loss/stoppage of
    income on account of:
    
    
    
    
    

    Illness
    Disability
    Maternity
    Old age
    Death

    Unorganised sector workers


    

    Unorganised component has been growing in


    the last five decades due to:
    
    

    Shift from factory to home-based work


    Large factories subcontracting the work to smallscale units
    Government policies permitting small-scale units
    not to comply with social security norms

    This resulted in lack of direct relationship


    between the employer and the worker
    5

    Social security for the unorganised


    workers
    

    Unorganised workers contribute to over 60%


    of the national income
    Yet, they do not have sufficient and reliable
    access to promotional and protective social
    security.
    Promotional social security implies food,
    housing, education and health securities
    Preventive social security includes protection
    against contingencies (identified by ILO) that
    result in reduction or stoppage of income
    6

    Promotional social security (1)


    

    Provided through nation-wide schemes and


    programmes such as
    
    
    

    Public distribution system


    Integrated Child Development Programme
    Rural employment programmes, etc.

    Primarily aimed at households living below poverty


    line
    Plagued by problems of targeting, inefficient
    delivery, leakages, etc.
    Only schemes; workers do not have right to demand
    7

    Promotional social security (2)


    

    Lack of sufficient access to promotional social


    security has the following implications
    
    

    
    
    
    

    Unemployment and insecure employment


    Shifting places and occupations in search of
    employment
    Wages lower than those fixed by the government
    Low levels of education
    Limited access to health delivery systems
    Widespread poverty and deprivation

    These are particularly relevant in the case of


    poor unorganised workers
    8

    Protective social security


    

    
    
    

    Multiple schemes and programmes both at the


    Central and State levels aiming at social protection of
    the under-privileged.
    They have been framed at random at various points in
    times in response to the expedience of the day
    They do not conform to any overall design.
    Nor do they represent a uniform policy or plan.
    The social security situation in India is characterised
    by the lack of a consistent policy.
    Let us examine some important schemes.

    Social assistance
    

    National social assistance programmes for old age


    and maternity
    Social assistance in some states for widows and
    disabled.
    

    
    
    

    Target only destitutes and persons living in households


    below poverty line
    Very small amounts of benefit (Only 3 Euro as old age
    pension per month)
    Implementation loopholes and difficult procedures
    Miniscule coverage
    Lack of organisation among workers leading to poor access

    10

    `Universal health insurance


    

    
    
    
    

    
    

    This is group health insurance scheme


    covering hospitalisation expenses
    Now targets only poor households
    Voluntary membership
    Government subsidy towards premiums
    Not many takers; only 0.5% unorganised
    workers in the scheme
    `Universal only in the name of the scheme
    Poor awareness of the scheme
    11

    Social insurance
    

    Government and public sector insurance company


    have started contributory group insurance scheme
    

    
    
    

    
    
    

    Provides life and disability cover for workers in 40


    occupational groups
    Also incorporated educational scholarships
    Collaboration with NGOs
    Available for micro-finance group members

    6.3 million workers are covered


    Renewal rate has been consistently over 60%
    Key lesson: plurality of institutions and building upon
    the micro-finance efforts would work.
    12

    Health insurance scheme in Karnataka


    

    
    
    

    State government and cooperatives have come


    together to implement health insurance scheme
    Government part subsides the premiums
    Builds on public private partnership.
    The coverage has been impressive; 2 million
    workers in one state!
    Key lessons:
    

    
    

    Utilise the existing social capital base (cooperatives in this


    case).
    Plurality of actors is ideal
    Public private partnerships hold the key
    13

    National social security bill


    

    Proposed a minimum social security cover for all the


    unorganised workers (universal)
    Sought to cover health, disability, old age, maternity
    and death
    Contributions from employer, where s/he can be
    identified; otherwise, by the government
    This would have been a major step towards
    
    
    

    Universal approach
    Tax based financing
    Provision of right to social security
    14

    National social security bill


    

    But, the bill in its present form is unlikely to be


    passed.
    Lack of direct relationship between employer and
    worker results in greater financial burden on
    governments
    It is now proposed that
    

    
    

    National social security board will formulate `schemes from


    time to time depending on the need
    Targeting on households below poverty line
    Expected to be only a `scheme; legal entitlement may be
    missing
    15

    Heterogeneity within unorganised sector


    

    Key problem with the social policy in India is


    that it assumes homogeneity among
    unorganised workers
    But, this sector is heterogeneous in terms of
    
    
    

    Social security needs


    Ability to contribute
    Membership and participation in institutions

    We can divide unorganised workers into two


    categories
    16

    Characteristics of unorganised workers


    Ultra Poor
    Inability to meet the basic needs
    Not reached the growth threshold
    Promotional social security is the
    basic need
    Find it difficult to contribute for
    social security due to limited and
    insecure livelihoods
    Low to medium participation in
    institutions for rural development
    

    Upwardly Mobile Poor


    Fulfilled basic needs and reached
    the growth threshold
    Give priority to protective social
    security needs
    Ability to contribute to social
    security is high
    Participate in wide array of
    economic activities
    Medium to high participation in
    institutions of rural development
    

    17

    Ways Forward
    

    Move towards universal social security based


    on solidarity principles
    Contributions together with tax income as
    financing arrangement
    Promote decentralised approach wherein
    people will play a major role with the help of
    different institutions.
    Integrated approach in the provision of social
    security
    18

    Social security as an integral element of


    poverty alleviation for the Ultra Poor
    

    Improving service delivery systems to provide basic


    needs.
    Governance of these institutions to be improved in terms
    of inclusion, participation, accountability, etc.
    New institutions such as SHGs to be formed among
    them and/or, the existing ones to be strengthened for
    this purpose These to advocate the cause of ultra
    poor.
    Subsidy to provide social protection and/or convergence
    of resources to provide protection against old age, illhealth, unemployment, death, maternity, etc.
    SHGs to be linked to local government at the village
    level for providing key basic needs and convergence of
    resources.
    19

    Protective social security for the Upwardly


    Mobile Poor
    

    
    

    
    
    

    Public policy to focus on an environmental development,


    economic development and provision of social security
    (protective)
    This has two implications.
    Improving employment opportunities for the ultra poor and
    greater poverty alleviation.
    Help the upwardly mobile poor not to slip back into poverty.
    No need for subsidies as they can contribute.
    What they need is inclusive, participatory, transparent and
    effective social security system.
    They can be linked to private insurance companies with the state
    playing facilitating role.

    20

    Key challenges
    

    How to design a social security system that


    provides
    
    
    

    Social security
    Provides basic needs
    Improves environmental and economic
    infrastructure

    21

    Key challenges
    

    How to design a system that provides


    

    Positive incentives to upwardly mobile poor to join


    in contributing social security
    Negative incentives for them not to clamour for
    subsidies provided to the ultra poor

    How to provide incentives to upwardly mobile


    poor so that they link up with private
    insurance companies

    22

    Key challenges
    

    For effective and efficient social security


    system, there is a need to integrate state,
    market and civil society
    But the question are.
    

    Do we have sufficient social capital base in a


    large and diverse country like India?
    How to improve the participation, inclusion,
    accountability in these institutions?
    How to harmonise the relations among these
    actors?
    23

    THANK YOU

    24

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