Towards Universal Social Security: Moving Beyond Fragmented Approaches for Workers

Universal Social Security: A Structural Imperative, Not a Policy Add-On

The government's fragmented approach to social security betrays a deeper structural blindness to India's workers' realities, particularly those in the informal sector who constitute over 90% of the workforce. Piecemeal reforms, whether through the Social Security Code 2020 or schemes like e-Shram, fail to align with the urgent need for universality, integration, and proactive planning. This editorial argues that India's social security framework remains an exercise in exclusion, underfunded ambition, and reactive planning, and it must radically transform to secure the dignity and well-being of all workers.

The Institutional Landscape: Legal Framework and Governance Challenges

India's Social Security Code, 2020, ambitiously consolidated nine central labor laws under one umbrella, promising streamlined governance. It mandates the creation of a National Social Security Board to oversee schemes for gig, self-employed, and unorganized workers. Despite this legislative unification, the practical realities remain fragmented. Welfare boards dedicated to construction workers or beedi workers, for instance, have either underutilized or misallocated funds, as evidenced by ₹70,744.16 crore collected for construction workers that largely remain unspent.

The Code provides for traditional benefits like Provident Fund, Gratuity, and maternity benefits, but also aims to include emerging categories such as gig workers under Employee State Insurance Corporation (ESIC) and other schemes. Yet, the system lacks the nimbleness required to respond to a shifting employment landscape, including providing coverage for gig-platform economy workers, where employment contracts are fluid and benefits uncertain.

Efforts like Ayushman Bharat, e-Shram Portal, and PM-SYM offer targeted relief and a semblance of inclusion but fail to ensure portability, universality, or equity in distribution. The institutional reliance on multiple schemes governed by disparate departments stymies what could be a coherent universal framework.

The Argument: Evidence of Exclusion and Fragmentation

The exclusionary nature of India's social security approach stems from its fragmented institutional design, tying benefits predominantly to formal employment. Over 90% of India's workers—unorganized sector, gig workers, and migrants—bear the brunt of this design flaw.

• Migrant workers: Despite the 'One Nation, One Ration Card' scheme enabling portability, social security benefits beyond food access often fail to follow these workers. States do not universally recognize entitlements under e-Shram, limiting utility for seasonal migrants.
• Underfunding: In Budget 2023-24, ₹16,000 crore was allocated for welfare schemes targeting informal workers—a fraction of the estimated need for universal coverage.
• Implementation inefficiencies: Welfare boards have struggled, as demonstrated by judicial scrutiny in Kerala over their underperformance. Reports regularly highlight delays in payments and absence of worker registry linkage to entitlements.

These failures are compounded by the structural inability to identify beneficiaries efficiently. While e-Shram is a step toward a unified registry, its current implementation leaves labor identification incomplete and disconnected from genuine welfare service delivery.

The gig-sector expansion presents newer threats. Platforms like Uber or Swiggy, relying on contractual arrangements, evade traditional definitions of employers and employees, throwing workers out of safety nets such as Provident Fund or life insurance coverage.

The Counter-Narrative: Can Targeted Schemes Work?

Proponents of the current fragmented model argue that targeted schemes allow policymakers to address specific worker categories—a construction worker may require different benefits compared to a gig worker. They also point to India's fiscal limitations as justification for incremental reforms rather than holistic coverage.

However, this argument falters in the face of mounting exclusionary pressures. While schemes like PM-JAY or Ayushman Bharat provide healthcare access to informal and gig workers, their scope remains narrow, leaving out broader income and employment security frameworks. Targeting fails particularly for migrant workers, gig workers, and women who often juggle informal work with unpaid care responsibilities.

Learning from Global Models: Universality Works Better

India's social security debates are incomplete without considering international precedents. Brazil's "Bolsa Familia" stands out not merely for its direct cash transfers to poor families but for its efficiency in registering and identifying beneficiaries across demographic and employment types. Bolsa Familia's decentralization to municipalities also offers lessons for India's underperforming welfare boards.

Critics often cite fiscal impossibility in replicating such models. Yet, a comparison is telling. As a percentage of GDP, Brazil spends around 2.5% on Bolsa Familia relative to the meagre allocations (around 0.6%) India dedicates to social security for informal labor. Clearly, India's challenge is less about capacity and more about political will.

Assessment and Realistic Next Steps

India cannot afford to continue "scheme multiplication" while neglecting universal inclusion. The fragmented approach not only exacerbates inequality but fundamentally misunderstands social security as reactive welfare rather than a right.

Realistic reforms include:

• National Registry Integration: Expand e-Shram to become a unified live worker registry for direct benefit transfer linkages.
• Funding Enhancement: Increase expenditure on welfare schemes to 2-3% of GDP, aligning it with global standards.
• Universal Coverage Legislation: Amend the Social Security Code, mandating universal baseline security benefits irrespective of employment category.
• Accountability Mechanisms: Strong audits of welfare boards, transparent fund utilization reports, and state-central integration in implementation.

If the transformation toward universal social security remains stalled, ongoing demographic pressures—aging populations, gig labor rise—will make piecemeal fixes increasingly insufficient to meet India's SDG mandates.

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