Towards Universal Social Security: Moving Beyond Fragmented Approaches for Workers

Brief Context

Indias social security framework has long been criticized for its fragmented approach, particularly in addressing the needs of informal workers, and highlighting the need for a comprehensive and universal social protection system.

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Syllabus: GS2/Governance; Social Issues

Context

• India’s social security framework has long been criticized for its fragmented approach, particularly in addressing the needs of informal workers, and highlighting the need for a comprehensive and universal social protection system.

About the Social Security

• It is a crucial aspect of economic and social policy aimed at providing financial and social protection to the country’s diverse population.
• It is primarily delivered through government initiatives, employer-based benefits, and social insurance programs.
• Social protection is a recognized human right, essential for achieving the Sustainable Development Goals (SDGs).
  • Goal 1 of the SDGs aims to end poverty by 2030 through national social protection systems, ensuring the coverage of vulnerable groups.

Global Perspective and Sustainable Development

• India’s Universal Social Security aspiration resonates with ILO’s Social Protection Floors Recommendation, which calls for:
  • Basic income security;
  • Access to essential health care;
  • Extension to informal economy;
• Article 22 of the Universal Declaration of Human Rights: It emphasizes social security as a fundamental right.
• India’s efforts are significant, though still evolving compared to models in countries like Brazil (Bolsa Familia) or South Africa (social pensions).

Current Challenges in Social Security  

• Fragmented Framework: Social security in India is often tied to formal employment, leaving informal workers excluded or disadvantaged.
  • Welfare boards, which are central to the distribution of benefits, have faced significant inefficiencies and underutilization of funds.
• Gig Workers and Emerging Categories: The rise of gig workers has prompted new schemes, such as health coverage under Ayushman Bharat and transaction-based pension policies.
  • However, these measures remain reactive, addressing challenges only when new worker categories emerge.
• Implementation Gaps: Reports reveal delays in remittance payments and underutilization of welfare funds, such as the ₹70,744.16 crore collected for construction workers.
  • Even states with strong welfare records, like Kerala, have struggled with the effective functioning of welfare boards.
• Underestimation of Coverage: The ILO report does not account for in-kind benefits like food security and housing or state-administered schemes.
  • The actual coverage is expected to be higher once these factors are included.
• Low Coverage in the Unorganized Sector: Over 90% of India’s workforce is in the unorganized sector, yet only a small fraction benefits from social security schemes.
• Challenges in Implementation:
  • Fragmentation: Multiple welfare schemes, managed by different departments.
  • Identification: Lack of a single unified worker registry (eShram helps but incomplete).
  • Funding Gaps: Limited fiscal allocation for full-scale universal coverage.
  • Portability: Migrant workers lack portability across states.
  • Awareness: Many workers are unaware of entitlements.

India’s Universal Social Security Vision

• It emphasizes inclusion of Unorganized sector workers (~90% of workforce); Migrant workers; Gig and platform economy workers (e.g., Swiggy, Uber); Women workers; and Senior citizens without pensions.

Social Security Code, 2020

• It consolidates nine central labor laws into one unified legislation, as an umbrella scheme.
• It mandates the creation of a National Social Security Board to recommend suitable schemes for different classes of workers, including gig workers and the self-employed.
• It covers a broad spectrum: Provident Fund; Employee State Insurance; Gratuity; Maternity Benefit; Social security for gig and platform workers; and Welfare for unorganized workers.

Need for a Universal Social Protection System  

• Proactive Approach: India must reimagine its social security framework to address the precarious nature of informal work comprehensively.
  • A universal system would ensure protection for all workers, regardless of their employment type or sector.
• Integration of Targeted Relief: Combining universal social protection with targeted support for specific worker categories can address unique challenges while ensuring inclusivity.
• Alignment with Global Standards: As a founding member of the ILO, India should ratify the Social Security (Minimum Standards) Convention, 1952, to establish basic social security principles.

Recent Expansions in Social Security

• Extending Benefits to Gig and Platform Workers: Under the social security umbrella through platforms like e-Shram and the Social Security Code 2020.
• Digital and Financial Inclusion: The Jan Dhan-Aadhaar-Mobile (JAM) Trinity has strengthened the delivery of welfare benefits, ensuring direct benefit transfers (DBT) to beneficiaries, reducing leakages, and improving transparency.
• Ration Card Portability under ‘One Nation, One Ration Card’ (ONORC): It enables migrant workers to access subsidized food grains anywhere in India.
• Strengthening Healthcare and Insurance for Informal Workers: The government has been pushing for the inclusion of informal workers in health schemes, ensuring access to PM-JAY and ESIC facilities.

Conclusion  

• Relying on piecemeal approaches to social security risks leaving vulnerable workers behind and creating inequities between different categories of informal work.
• By adopting a universal and inclusive social protection system, India can ensure the dignity and well-being of its workforce while fostering sustainable economic growth.

Source: TH