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Social Protection in India: Two Initiatives

Social Protection in India: Two Initiatives. K.P. Kannan, Member National Commission for Enterprises in the Unorganised Sector, New Delhi, and Fellow, Centre for Development Studies, Trivandrum, Kerala, India. India.

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Social Protection in India: Two Initiatives

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  1. Social Protection in India: Two Initiatives K.P. Kannan, Member National Commission for Enterprises in the Unorganised Sector, New Delhi, and Fellow, Centre for Development Studies, Trivandrum, Kerala, India

  2. India • Many promotional measures but highly inadequate. The challenge is one for extension of coverage and effective implementation. (Child and mother nutrition - ICDS, Mid-Day Meal, PDS, Health care, Primary education - SSA).

  3. Leading State • In this respect the State of Kerala in southern India is the leading State - both in terms of promotional and protective social security. Reflected in high HDI, GDI and other welfare and recently income indicators. • Nearly 60% of informal workers have protective social security cover through the institution of Welfare Funds (28 in all).

  4. All and informal workers (in ml.)1999-00

  5. Two recent and major national initiatives • Rural Employment Guarantee Act, 2005. • Unorganised Sector Workers Social Security Bill, 2005 (Draft under debate). • Both are ‘rights-based’. • One is Promotional. • The other is Protective.

  6. Main features of REGA • Upto 100 days of employment per household on demand. • To do unskilled manual work. • Wage rate to be fixed by the Central Govt. • Employment to be provided within 15 days of demand. Otherwise, unemployment allowance to be paid as determined by the State Government.

  7. REGA • Implementation by State Governments. • State Employment Guarantee Council • Standing Committee at the District level. • Programme Officer at the Block Level • Village Panchayats to send proposals

  8. REGA • A National Employment Guarantee Fund • State Employment Guarantee Fund. • All wage costs and 75% of non-wage costs to be borne by the Central Govt. • Total cost: Minimum of 1% of GDP (2004-05). Maximum of 2.5% of GDP. • This is equal to 8 to 22% of Central Govt budget.

  9. REGA • To begin with 200 districts to be covered (nearly one-third). • Immediate costs: 2.6 to 7% of Central budget(=around US$100 bn).

  10. Main Issues • Political commitment of State Governments. • Linking projects to physical capital formation. • Linking projects to social sector (HD) projects to benefit women. • Initiative and capacity of Local Govts (Panchayats)

  11. Main features of Soc Security Bill • To cover all informal workers in the whole country. • Eligible workers estimated at around 300 million. • Both rural and urban. • Workers in the informal sector as well as informal workers in the formal sector to be covered.

  12. National Minimum SS • Health cover for family (for sickness for all plus injury to worker and death of breadwinner). • Maternity for self or spouse. • Life insurance (death and disability). • Old age pension

  13. Financing • Contribution from worker, employer (wherever identifiable, govt if not) and government @ Rs.365 each /year/worker, i.e. Rs.1,095 per year per worker. • Contribution of workers belonging to poor households – Central Govt to pay. • Contribution of employers who cannot be identified – Central and State Govts to pay at 3:1 ratio.

  14. Financing (contd..) • Government contribution at 3:1 by Central and State Govts. • Contribution of Central Govt (Rs.225.58 bn) and State Govts (Rs.50.1 bn) = 0.8% of GDP (2004-05). • Cost to Govt not to exceed 1% of GDP including administrative expenses.

  15. Other features of SSBill • Proposed NMSS to form the ‘core’. • All existing schemes to continue. • State Govts may add to the benefits . • Many State Govts do have their own schemes.

  16. Organisational structure • National Social Security Fund and Board • State Level SS Board • A network of offices of State Boards down to local level called Workers Facilitation Centres (WFC). • WFCs are designated agencies such as existing Welfare Funds, Labour Coops, Workers Organisations and/or NGOs.

  17. Organisational structure (contd..) • If these do not exist, Local Self Govts (Village Panchayats/Nagar Palikas) to act as WFCs.

  18. Membership • Enrolment by registration. WFCs to assist workers to enrol and get IDs.

  19. Delivery of Benefits • Insurance-based. State Govts to negotiate with insurance companies. • Agreements between State Boards and insurance companies. • Delivery: Several options • E.g. Through Post Office network (Some State Govts already use this to distribute old age pensions to the aged poor).

  20. Phasing • To cover all eligible workers within a period of five years.

  21. Main Challenges • Uneven level of organisation of workers (From high level in Kerala to low level in UP). • Calls for concerted public action to mobilise workers. • Uneven level of commitment by State Governments.

  22. Prospects • Political commitment at the national level – Common Minimum Programme • Commitment of political parties and trade unions. • Availability of ‘best practices’ in a number of States. • International commitment. Eg. ILO’s Global Campaign on Extension of Social Security.

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