Structural Dualism of Social Security in India: Critical Concerns
J John
Executive Director, Centre for Education and Communication, New Delhi, Indiaand Editor, Labour File.
Email: jjohn@cec-india.org
Abstract
The article argues that denial of Social Security benefits to 93 per cent ofIndia’s 457.5 million workforce (2004-05), structural and has a definable historical root. The Constitution of India, though premised on equity and justice for all citizens, makes a clear distinction between enforceable civil and political rights and non-enforceable economic and cultural rights. The legislative measures adopted by the independentIndiafollowed a dual system of social security, which provided social security to a section of workers and denying it to the majority. The refusal to universalising social security was also based on an argument thatIndiadoes not have wealth to divide. Consequently, the national planning process, addressed the concern of equity and justice expressed in the Constitution of India by formulating changeable and non-justiciable schemes for specific sections among the poor inIndia. This reinforced the duality of social security system inIndiaeven afterIndiabecoming the sixth largest economy in the world. The recent enactment, by the Government of India, of social security legislation for unorganised workers, neither manifests a political will for distributive justice nor a break away from the structural dualism.
Introduction
Government of Indiahas accepted that the right to social security constitutes a basic human right[1] as enshrined in major international human rights instruments such as the Universal Declaration of Human Rights and the International Covenant on Economic, Social and Cultural Rights (ICESCR). Government of India also accepts that the right of every one to social security has been recognized in the Constitution of India[2]. Nevertheless, India has not ratified the ILO Social Security (Minimum Standards) Convention, 1952 (No. 102). It took 61 years of self-governance[3], for Government of India to enact ‘The Unorganised Worker Social Security Act’, in December 2008. But, this Act has been criticised as a good for nothing piece of legislation by activists, academics and legal luminaries[4].
Absence of Budgetary Provision for Social Security
Government ofIndia’s neglect of the unorganised workers is reflected in the annual budgets. The government budget is considered an expression of its intentions, with regard to its expenditure over the following year, and its receipts to meet such expenditure in that year. Given this, the Ministry of Labour and Employment’s (MoLE’s) budget should reflect the nature of its commitment to social security for unorganised workers. The ‘Notes on Demands for Grants, 2007—2008 and 2008—09’ of the MoLE shows a figure of Rs 5 crores (Table 3) towards social security for the unorganised sector workers.
Table 1: Social Security for Labour (In crores of rupees)
|
Particulars |
Budget (2007–08) |
Revised (2007–08) |
Budget (2008–2009) |
| 7. Employees Pension Scheme, 1995 | 840.00 | 990.00 | 967.22 |
| 8. Family Pension-cum-Life Insurance Scheme forPlantationWorkers inAssam, Deposit Link Insurance Scheme for TeaPlantationWorkers inAssam | 14.80 | 15.79 | 15.41 |
| 9. Social Security for the Unorganised Sector Workers | 5 | 1.25 | 5 |
| 9.01 Health Insurance for Unorganised Sector Workers | 0 | 0 | 200 |
| Total: Social Security for Labour | 859.80 | 1007.04 | 1187.63 |
|
Source: Provisions for social security in Expenditure Budget, Vol. II, Budget 2008–2009, Notes on Demands for Grants, 2008–2009, Demand No. 60, MoLE.
|
|||
Of the total demand of Rs 1187.63 crores for ‘Social Security for Labour’, Rs 967.22 crores is for the government’s contribution to Employees Pension Scheme 1995 that provides for family pension and life insurance benefits to industrial workers, who are within the Provident Fund scheme. The demand for Rs 15.41 crores is the central government’s contribution to the plantation workers inAssam, governed by the Assam Tea Plantation Provident Fund and Family Pension and Employees Deposit Linked Insurance Act administered by theAssamgovernment.
The non-plan expenditure component of the expenditure budget of the ministry shows a budgetary allocation of Rs 1464.24 crores in 2008-09 as against a revised budget of Rs 1468.22 crores in 2007-08; and under social security and welfare, Rs 695.38 crores in 2008-09 as against a revised budget of Rs 646.22 crores in 2007-08, showing no increase at all for non-plan expenditure under the heads of social security and labour welfare. Similarly, the central Plan outlay for ‘Social Security for Labour’ does not show substantial increase. From Rs 519.52 crores in 2007-08, it has increased only to Rs 800 crores in 2008-09.
Why the public provisioning for social security for workers, especially the unorganised workers, inIndiais ridiculously low? It is argued here that social security was not seen as a right that all workers were entitled to but as something to be accomplished as a consequence of economic development, where a strong articulation of the non-viability of social security for all workers arose because the state looked at social security as an ‘economic, social and cultural (ESC)’ entitlement. It is also been argued that the provision of social security for some has become the justification for denial for many, due to the creation of a dual policy on social security.
This article briefly anlayses the political economy of the failure of government ofIndiato provide social security to all its workers. The grave implication of the absence of a political will in the enactment of a universal social security legislation for unorganised workers becomes obvious when we look at the magnitude of workers who are without social security protection inIndia.
The Magnitude of Unorganised Workers in India
The results of the 61st Round of sample survey of the National Sample Survey Organisation (NSSO 2006) showed that out of total workforce of 457.5 million in the country, only 62.6 million workers are employed in the organized sector and remaining 394.9 million workers in the unorganized sector (Table 1). Even among the so-called organized sector workers, 29.2 million workers are treated as unorganised or informal workers in the organized sector. According to the NSSO figures, the unorganised workers in the Indian economy stood at 422.6 million as on 2004-05. These are the unprotected workers in the Indian economy. The National Commission on Enterprises in the Unorganised Sector (NCEUS 2007) has established that ‘poor and vulnerable’ – those with an income roughly below USD 2 in PPP terms – constitute 77 per cent (836 million people) of the population.[5] The report has further pointed out that 78.7 per cent of workers fall within this category, establishing structural link between the poverty and work (Table 2). This is notwithstanding the official estimation[6] that the poverty ratio is 28.3 per cent in rural areas, 25.7 per cent in urban areas and 27.5 per cent for the country as a whole in 2004-05 (Economic Survey 2009). However, a recent report by the Supreme Court of India appointed food commissioner N C Saxena (on BPL surveys) has recommended that 50% ofIndia’s population be given below-poverty-line cards.
Table 2: Total Employment and Relationship between Types of Employment (UPSS),1999-2000 & 2004-05
|
Sector/Worker |
Total Employment (Million) |
||
|
Informal/Unorganised Worker |
Formal/Organised Worker |
Total |
|
|
1999-2000 |
|||
| Informal/Unorganised sector |
341.3 (99.6) |
1.4 (0.4) |
342.6 (100.0) |
| Formal/Organised sector |
20.5 (37.8) |
33.7 (62.2) |
54.1 (100.0) |
| Total |
361.7 (91.2) |
35.0 (8.8) |
396.8 (100.0) |
|
2004-2005 |
|||
| Informal/Unorganised sector |
393.5 (99.6) |
1.4 (0.4) |
394.9 (100.0) |
| Formal/Organised sector |
29.1 (46.6) |
33.4 (53.4) |
62.6 (100.0) |
| Total |
422.6 (92.4) |
34.9 (7.6) |
457.5 (100.0) |
Note: Figures in brackets are percentages
Source: Report of the Conditions of Work and Promotion of Livelihoods in the Unorganised Sector, NCEUS, 2007 pp04
Table 3: Percentage distribution of Unorganised Workers across Expenditure Classes
|
Status |
Total |
Self-employed |
Regular wage workers |
Casual workers |
| Poor and vulnerable | 78.7 | 74.7 | 66.7 | 90.0 |
| Higher Income Group | 21.3 | 25.3 | 33.3 | 10.0 |
| Total | 100.00 | 100.00 | 100.00 | 100.00 |
Source: Report of the Conditions of Work and Promotion of Livelihoods in the Unorganised Sector, NCEUS, 2007 pp08
Unorganised workers fall into myriad categories. Among them, though the list is not exhaustive, are small and marginal farmers, landless agricultural labourers, sharecroppers, fishers, forest workers, those engaged in animal husbandry, beedi workers, building and construction workers, toddy tappers, scavengers, loaders and unloaders, midwives, domestic workers, barbers, vegetable and fruit vendors, newspaper vendors, etc. Based on the nature of employment, unorganised workers may belong to contract and casual labourers, be self-employed, attached agricultural labourers, bonded labourers, migrant workers or unpaid family workers. Most unorganised workers are dalits, adivasis or women because of the historical social, economic and skill-based incapacities they have experienced.
Approaches to Social Security
Amartya Sen addressed poverty as ‘capability deprivation’ and asserted that basic objective of development should be expansion of human capabilities (1999); ‘capability’ defined as ‘the alternative combinations of functionings from which a person can choose’ (2002). He advocates not only public participation but also state intervention in enhancing capabilities of the people. In a recent article anlaysing the global financial crisis, Amartya Sen points out the importance of non-market mechanisms, particularly, social security systems for the survival of capitalism itself.
“All affluent countries in the world—those in Europe, as well as the US, Canada, Japan, Singapore, South Korea, Australia, and others—have, for quite some time now, depended partly on transactions and other payments that occur largely outside markets. These include unemployment benefits, public pensions, other features of social security, and the provision of education, health care, and a variety of other services distributed through nonmarket arrangements. The economic entitlements connected with such services are not based on private ownership and property rights.”
Jean Dreze and Amartya Sen also distinguish between two aspects of social security – ‘protection’ and ‘promotion’ (Dreze and Sen, 1988, 2002). Protection is concerned with preventing a decline in living standards in general and in the basic conditions of living in particular. The objective of ‘promotion’ is to enhance normal living conditions and overcome capability deprivation.
Ravi Srivastava (2006) argues that though conventionally, the notion of social security has been linked to the workers’ status in formal labour markets and the focus has been on contingencies rather than on deficiencies, from the point of view of developing countries, the two notions (viz. deprivation and vulnerability) are closely interlinked, necessitating a broader notion of social security.
Guy Standing (2002) makes a distinction between social security and social protection. He defines Social security “as a combination of social insurance and social assistance (‘state charity’). It is the system by which state transfers are provided, usually but not always in cash form, supposedly related to specific contingency risks, such as sickness, invalidity, old age, unemployment and motherhood. Defining what is a risk, and specifying which risks should be covered and which not, are among the difficulties of social security.” Social protection, he says, is a broader concept, covering not just state-based schemes of income transfers, based on social insurance or means-testing or other conditionality tests, or universal or citizenship rights, but also social services, community initiatives, private commercial or voluntary schemes, and self-help arrangements, such as “friendly societies”.
The Convention 102 of the ILO has defined nine ‘classical branches of social security’ namely, medical care, sickness benefit, unemployment benefit, old-age benefit, employment injury benefit, family benefit, maternity benefit, invalidity benefit, and survivors benefit. It establishes general responsibility of the state for the provision of the benefits. Subsequently, the ILO (2008) has defined social security as “The adoption of public measures to ensure basic income security to all in need of protection, in order to relieve want and prevent destitution by restoring up to a certain level income which is lost or reduced by reason of inability to work or to obtain remunerative work due to the occurrence of various contingencies: sickness, unemployment, old age, employment injury, family responsibilities, maternity, invalidity or death of the breadwinner.”
Wouter van Ginneken (2003)[7] identifies four basic characteristics of the ILO definition. First, it establishes that people derive individual rights and entitlements from social security. Second, ‘social’ in the social security is defined as that is provided within the context of public or collective and not-for-profit arrangements. Third, it establishes that the aim of the social security is protection, which distinguishes it from other measures like promoting employment and the economy. Fourth, its impact goes beyond immediate contingencies to relieving want and preventing destitution.
In a similar vein, General Comments by the Committee on Economic, Social and Cultural Rights (2006) defines social security as the right to social security covers “the right to access benefits, through a system of social security, in order to secure adequate (i) income security in times of economic or social distress; (ii) access to health care and (iii) family support, particularly for children and adult dependents. Economic and social distress includes the interruption of earnings through sickness, maternity, employment injury, old age, invalidity or disability, death or other factor that is either beyond a person’s control or would otherwise be inconsistent with the principle of human dignity.” General comments distinguishes social security from other social protection and health measures, like those towards social infrastructure, the rights to food, housing and water etc., the state parties may pursue.
Social Security and Distributive Justice
‘Work’ establishes a distinctive human relationship with nature and makes humans a ‘species-being’. Amartya Sen has emphasised the importance of work in giving individuals identity, respect and purpose in life. But work is not always in the realm of freedom. All those who work need not enjoy their work. Workers usually experience alienation. The labour theory of value says that ‘work’ or ‘labour’ is the source of all value; under capitalism, all value generated in surplus labour’ beyond necessary labour’ is denied to workers. Given this, a semblance of equity or distributive justice in this situation may be achieved through wages, the portion of the value returned to the worker as opposed to the value accrued by the employer. A second measure that brings actual equity and distributive justice is the provision of social security, a measure by the state to meet the contingencies in the lives of workers and their families, as a right by the state.
Jawahar Lal Nehru observed in his famous speech in Lahore Session of the Indian National Congress[8] (31 December 1929) that India cannot aspire to be a ‘welfare state’ because ‘there was no existing wealth to divide’. The same concern is reflected in Article 41 of the Indian Constitution on the rights to work and social security, “The State shall, within the limits of its economic capacity and development (emphasis added), 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.”
In 2008 Budget speech, the finance minister of India declared government’s decision to offer Rs.60,000 crores (US$12,500m) as loan waiver for indebted farmers. In his speech, the minister quoted a 1955 speech of Jawaharlal Nehru, the first Prime Minister of independent India, in which Nehru said, “These goals (social welfare) can only be achieved by a considerable increase in national income and our economic policy must, therefore, aim at plenty and equitable distribution. We must produce wealth, and then divide it equitably. How can we have a welfare state without wealth?” Absence of a universal social welfare programme inIndiahas been attributed here to absence of wealth to distribute. The Prime Minister’s statement also recognises the distributive aspect of social welfare programme. Nevertheless,Indiaopted not to be a ‘welfare state’.
Justiciability of Social and Economic Rights
Under international commitments and obligations,Indiais expected to conceive social security within the framework of human rights and to provide social security to all citizens equally. As a member of the United Nations,Indiahas signed the Universal Declaration of Human Rights (UDHR), the ICESCR, the Convention on the Rights of the Child (CRC) and the Convention on the Elimination of all forms of Discrimination against Women (CEDAW). Articles 21 to 31 of UN ‘International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families 1991’ provides for social security and other labour rights of migrant workers.
Though the overall spirit of the Constitution of India guarantees social security measures to unorganised workers, it does make it mandatory for the state to provide it as a right. This arises from the strong distinction the Constitution makes between the enforceable civil and political rights and non-enforceable economic rights. The Indian Constitution recognizes two types of rights: Fundamental Rights (Articles 14 to 31) and Directive Principle of State Policy (Articles 39 to 51). The former are intended to ensure the inviolability of certain basic rights individuals against state action, and are justiceable under Article 32 and 226 of the Constitution. The latter, though fundamental in the governance of the country, are not enforceable in any court of law and are expected to be progressively realised. If a right delineated under the Directive Principle is not obeyed, citizens cannot approach the court for remedy.[9] For instance, the ‘right to work’, the ‘right to education’, the ‘right to public assistance’, the ‘right to just and humane conditions of work and maternity relief’, the ‘right to living wage’ are under Part IV of the Directive Principles of State Policy, the provisions of which ‘shall not be enforceable by any court’. In 1947, in a symposium on ‘Planning for Labour’, Dr. B. R. Ambedkar, the chairman of the Constituent Assembly’s Drafting Committee, asked the question, “What should be the nature of the Constitution? Should it be a Constitution which should prescribe the political structure of the society or should it go further and prescribe the social and economic structure of the society as well?” He challenges the argument that a Constitution prescribing the shape of the economic life of society will take away the liberty of the individual, and asserts,
“Indeed, the safeguarding of individual liberty requires that the Constitution should prescribe the economic shape of society”
On the eve of the Constituent Assembly adopting the new Constitution, Dr. B. R. Ambedkar warned the nation of this inherent contradiction:
On the 26th January 1950, we are going to enter into a life of contradictions. In politics we will have equality and in social and economic life we will have inequality.[10]
Later on, amendments have been sought to make visions provided in the Directive principles to be made enforceable rights. The Constitution has been amended (86th amendment) to make education a fundamental right of every child between the ages of six and 14; and laws have been made with regard to the right to maternity relief and the right to work. However, many of these steps do not provide full measures of entitlements, for instance, the National Rural Employment Guarantee Act (NREGA) 2005 restricts the right of employment to 100 days, to rural workers and for unskilled work.
The Indian state has resisted, steadfastly and consistently, any temptation to make the right to social security a justiceable or enforceable right. It is often argued that the Indian state does not have the capacity to provide social security to all its workers. This argument echoed the statements of political leaders before independence, which became part of the formulation of the subject in the Constitution and is reflected in the Planning process and in all governmental positions.
The Government of India, in its periodic report on the implementation of the ICESCR (2006) admits that a budget-funded social security system similar to that available in developed countries is not feasible for Indiaat present[11]. With such strong articulation of the non-viability of social security for all workers theIndianState evolved a dual policy on social security. This proposition, that the state evolved a dual policy on social security needs further elaboration.
National Planning and Dual Social Security Systems
Institutionalized social security in an organized manner was not available in Indiaduring pre-independence era until 1947 besides the Workmen’s Compensation Act, 1923. Government of Indiaenacted a few important social security laws in the immediate years following India’s independence; and those bear the mark of Indian ruling classes’ approach to the trajectory and method of India’s development. Jawaharlal Nehru, who set the direction of India’s political and economic development, suggested it as a ‘third way’, a convergence between the opposing ideologies of capitalism on the one hand and communism on the other (Frankel, 2005), where he intended to combine the goals of growth and distributive justice. Creation of Planning Commission and the pursuance of ‘planned development’ was another step in this direction. In 1947, government, labour and industry entered into an unwritten contract based on a consensus that the immediate objective was nation-building and the creation of wealth. There were certain premises on which this social compact or industrial truce[12] (Vasant Gupte, 2004; Vivek Chibber, 2005) was made: (1) Wealth should be generated before we can think of distributive justice or ESC rights can only be achieved progressively when wealth is created; (2) India will eventually move into becoming a modern industrial state from a backward agrarian economy and the workers from a state of ‘un-freedom’ to free wage labourers.
State was also responding to the militant struggles of the workers inIndia, who were integral part ofIndia’s freedom movement. State stepped in to enforce some measures of economic security for the industrial working class – such as the rights at work including wages, working conditions, industrial relations, trade union rights etc., and social security. Among them were Industrial Disputes Act, 1947; Factories Act, 1948; Minimum Wages Act, 1948; Employees State Insurance Act, 1948 and the Employees Provident Fund and Miscellaneous Provisions Act, 1952, the last two being two important pieces of social security law for the industrial workers. These measures reflected a pursuit of the constitutional objectives of equity and justice. These were, however, premised on the idea that all workers would eventually become industrial workers with defined employer-employee relationships. This was not to happen, vast majority of workers remained within agrarian or informal relationships or self-employment, which eventually became the ground for dual system of social security inIndia.
The periodic report of the Government of India to the UNESC accepts that social security measures can be grouped under two categories—the organised sector[13] and the unorganised sector. Institutionalised social security cover for the organised sector is provided through the Employees State Insurance Act (ESI Act) 1948; the Employees Provident Fund and Miscellaneous Provisions Act (EPF & MP Act) 1952; the Workmen’s Compensation Act (WC Act) 1923; the Maternity Benefits Act (MB Act) 1961, and the Payment of Gratuity Act (PG Act) 1972. Other Acts include Coal Mines Provident Fund and Miscellaneous Provisions Act 1948, Coal Mines Labour Welfare Fund Act 1947, Mica Mines Labour Welfare Fund Act 1946 and Assam Tea Plantation Provident Fund Act 1965 and Seamen’s Provident Fund Act, 1966.
Two type of social security cover is provided under the ESI Schemes namely – (a) Medical Care and (b) Cash Benefit. Medical care is provided to the insured persons and their family members through a vast network of panel clinics. The ESI Schemes provide cash benefits in the events of sickness, maternity, medical benefit after retirement, dependent benefits, funeral expenses, rehabilitation allowance, standard benefit and employment injury. 8.4 million workers are covered under this act. The Employees Provident Fund Organisation, mandated by the EPF & MP Act, covers employees of the organised sector, and operates three schemes – the Employees Provident Fund (EPF), the Employees Pension Scheme and the Employees Deposit Linked Insurance Scheme (EDLIS). Government provides social security to its own employees during old age by providing pension. As on March 2007, EPF covers 44.4 million workers. The Payment of Gratuity Act, 1972 provides for payment of gratuity to the employees in every factory, mine, oil-field, plantation and railway and also to every shop and establishment in which 10 or more persons are employed. Maternity Benefit Act, 1961 covers the whole country and every establishment except those to which the ESI Act is applicable. Ninety per cent of the workers are outside the ambit of these laws as there are constraints like wage ceiling limit, the threshold limit of employment, strength of the establishment and schedule of industries restrictions. These constraints are not administrative aberrations, but real tools used by the State to deny social security rights to the majority of workers.
Government has not taken any serious step to remove these constraints and broaden the reach and coverage of these social security rights. On the contrary, a study group on social security constituted by the government in 1958[14] rejected the idea of comprehensive or integrated social security. The study group said in its report,
“Under existing circumstances, any large extension of social security measures will not be possible either in terms of coverage or actual benefits. The aim should be to improve upon existing measures and to simplify administrative procedure, restricting additional financial levy for the time being, to what is required for this limited purpose.”
Interestingly, among the members of this committee were VKR Menon, Director, International Labour Office,Delhi; Col. VM Albuquerque, Director General, Employees State Insurance Corporation, and SN Mubayi, Central Provident Fund Commissioner.
Government of Indiastill holds that a budget-funded social security system similar to that available in developed countries is not feasible for Indiaat present[15]. The Five Year Plans of the country did not address the issue of social security till the 9th Plan, (1997-2002) which in principle rejects a universal social security system:
“The social security set-up as it exists among industrial countries is not applicable for India. Firstly, nearly half of those employed are the self-employed, which is a very small category in the industrial countries. Most of the self-employed are in the informal sector, in contrast to the industrial countries, where formal sector employs bulk of the workforce. Secondly, the incidence of poverty is high here and persistent over time. It is rooted in several structural features of the economy. These include low wages, their irregular payments and irregular employment.”
The 10th Five Year Plan (2002-2007) also did not have anything different to offer. Though the 10th Plan suggested a legislative and administrative framework for social security coverage of the unorganised sector, it proposed a strategy ‘to motivate and encourage the State Governments to formulate and implement schemes and programmes targeted at certain occupational groups in the unorganised sector without putting any additional pressure on the budget’.
Planning Commission uses poverty and informal nature of employment as a justification for denying social security for all rather than considering them as compelling reason for extending social security rights to all. In the same document, Planning Commission advocates a ‘location-specific’ policy of social security by arguing that ‘the benefits of a uniform country-wide scheme cannot reach effectively all the locations.’ Offering workers with location-specific and/or targeted social security schemes; and at the same time refusing to evolve enforceable and universal social security rights has become the hallmark of Indian state’s approach to 90 per cent of its workers. This approach was in line with the ‘poor centric’ approach rather than ‘worker centric’ approach to social security followed by the Planning Commission. From the fourth plan (1969-74) itself, poverty[16] has been seen increasingly as the central problem calling for special action in relation to specified socio-economic groups which have remained weak and deprived in essential services and opportunities (Expert Group, 1982). Consequently,India evolved a large number of schemes and programmes to provide social assistance to specific categories of poor, to generate employment during slack seasons and droughts, improve access of the poor to land and other productive assets etc. But these schemes are non-statutory in character, and thinly spread.
The periodic report of the Government of India to the United Nations Economic and Social Council (UNESC) informs us that the existing social security arrangements in the unorganised sector are in four groups, namely, (1) centrally funded, social assistance programmes; (2) social insurance schemes; (3) social assistance through welfare funds of central and state governments; and (4) public initiatives such as self-help groups by NGOs.
The centrally funded, social assisted programmes include schemes for both rural and urban areas under the National Social Assistance Programme (NSAP), which has three components, that is, National Old Age Pension Scheme (NOAPS), National Family Benefit Scheme (NFBS) and National Maternity Benefit Scheme (NMBS). The social insurance schemes available to the unorganised sector are operated through the LIC under a number of group insurance schemes, including Janashree Bima Yojana and Krishi Shramik Samajik Suraksha Yojana. Welfare funds operated by the central government through the Ministry of Labour include those for beedi workers, limestone and dolomite mine workers, iron ore, chrome ore and manganese ore mine workers, mica mine workers and cine workers.
These benefits available to unorganised workers are not a matter of entitlement, a real entitlement backed by the power of law. The schemes are implemented by various departments and ministries and show little coherence or coordination. Moreover, the schemes are changed frequently, probably based on bureaucratic initiatives or political exigencies, leaving the beneficiaries confused. For instance, the centrally sponsored ‘National Scheme of Welfare of Fishermen’ (NSWF) was launched in 1991-92 by amalgamating two earlier schemes—Janata Personal Accident Policy (started in 1982-83) and National Welfare Fund for Fishermen (started in 1986-87). These two schemes were made independent components of the NSWF and were renamed as ‘Group Accident Insurance for Active Fishers’ and Development of Model Fishermen Villages’, respectively. Simultaneously, a new programme called ‘Saving-cum-Relief’ was also added to the scheme as the third component in that year. The NSWF thus has three components and each component has a specific welfare objective in view.
Recent attempts towards a legislative framework for social security has come in the wake of the economic reforms launched in 1991, and the subsequent policies of liberalisation, privatisation and globalisation of the Indian economy. The Second National Commission on Labour, constituted by the Vajpayee government in 1998, had been asked “to suggest an umbrella legislation for ensuring a minimum level of protection to the workers in the unorganised sectors”. Interestingly, the first objective had been to rationalise existing laws relating to labour in the organised sector, arguing that these laws have become redundant in the context of changes in the economy and labour market. The approach of the state was on the one hand to strengthen the dualistic approach to labour market and social security, and on the other hand to propose ‘minimum level of protection’ for workers in the unorganised sector while taking away existing rights of workers. After the submission of the report, the National Democratic Alliance (NDA) government came up with the ‘Unorganised Sector Workers’ Social Security Scheme, 2004’ in January 2004 on pilot basis in 50 districts covering all States, which at the end of the period only enrolled 3500 workers.
The increasing pace of globalisation of Indian economy and the impact it has on labour in terms of dislocation, unemployment, and reduced social protection (Papola, 2004, Srivastava, 2006) has compelled the Dr. Manmohan Singh led United Progressive Alliance (UPA) government to declare its commitment[17] to social security for unorganised workers, particularly as a safety net. The Ministry of Labour & Employment drafted the ‘’Unorganised Sector Workers Bill, 2004’. The now defunct National Advisory Council (NAC) prepared a draft Bill namely, ‘the Unorganised Sector Workers Social Security Bill, 2005’. Meanwhile, the government set up the National Commission for Enterprises in the Unorganised Sector (NCEUS), which drafted two bills i.e. (i) Unorganised Sector Workers (Conditions of Work & Livelihood Promotion) Bill, 2005 and (ii) Unorganised Sector Workers Social Security Bill, 2005 and presented its report on Social Security for Unorganised Sector Workers in 2006. Finally, The Unorganised Worker Social Security Bill, 2007 was debated and passed by the Rajya Sabha in October, 2008 and by the Lok Sabha in December, 2008. The President gave her assent to it on 30th December, 2008.
The Act has received severe criticisms from trade unions and campaign organisations like Social Security Now[18], in view of the fact that it does not guarantee justiceable social security rights to workers. Moreover, it does not satisfy the four constituent parts of a social security scheme, namely, coverage, benefits, financing and administration (Wouter van Ginneken 2003). It has excluded more than 90 per cent of workers by way of limiting eligible unorganised workers as those below poverty line (BPL) and has precluded ‘unemployment and livelihood’ within the possible social security benefits to workers; it has not created a social security fund and does not have a well-defined administrative mechanism. Moreover, it declares an assortment of existing schemes as the social security schemes under the Act. The Act institutionalises the existing dualism in the social security system inIndia by crafting an emaciated and minimalist social security for unorganized workers. It also violates one of the fundamental principles of social security, that it is ‘public’ and not-for-profit; what the Act proposing is largely insurance based securities run and managed by private insurance companies.India’s working poor has great business potential!
Can Indiaactually afford giving social security to its workers? The periodic report (2006) concedes that the annual resource flow in respect of a few selected schemes is of the order of Rs. 280,000 million. In 2000, according to the World Labour Report, India’s public expenditure on social security was 1.8% of the GDP. In a recent study, ILO (2008) projects that Indianeeds to spend less than 4% of its GDP every year to put in place, what it calls a basic social security floor, in place. It would have four basic elements: universal basic old-age and disability pension; basic child benefits; universal access to essential health care and social assistance/100 day employment scheme. Subodh Varma (2009) calculates that including administrative costs of 15% of cash benefit expenditure, the whole package would cost Rs 200,000 crore, or 3.9% of India’s GDP in 2008 and 2.09 per cent by 2030. The periodic report further says that according to the Economic Intelligence Service, out of the aggregate expenditure of Rs. 40,13,950 million of the all state governments put together in 2001-2002, the sum of Rs 58,850 million or 1.466 per cent was allocated for social security schemes. The Central Government’s budget provision for social welfare schemes for the same year was even around – Rs 13820 million out of a total outlay of Rs 36,44,360 million. Indiahas produced wealth; and the country is now the fourth largest economy in terms of purchasing power parity and is projected, along with China, to rule the world in the 21st Century. India’s GDP (at constant prices with base: 1999-2000) grew from Rs. 224,786 crores in 1950-51 to Rs. 3,122,862 crores[19] in 2007-08; and has grown above 6 per cent in 2008-09, the year of global recession.India can afford social security for its workers.
References
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[1] See Combined Second, Third, Fourth and Fifth Periodic Report of India submitted in 2006 to the Economic and Social Council of United Nations as part of the Periodic Reports Submitted By States Parties Under Articles 16 and 17 of the International Covenant on Economic, Social and Cultural Rights.
[2] The Constitution enjoins the State in the Directive Principles to make ‘effective provisions 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’ subject to its economic capacity and development (Article 41). Article 42 empowers the State to make provision for securing just and human conditions of work and for maternity relief. Matters relating to social security issues are mentioned in the Concurrent List (List III in the Seventh Schedule of the Constitution of India).
[3] India acquired its independence from British colonial rule in 1947.
[4] See a report appeared in Daily Hindustan dated July 13, 2009. Chief Justice ofIndia, Justice K G Balakrishnan and Justice H B Sinha counted the deficiencies in the Unorgnased worker Social Security Act, 2008.
[5] The NCEUS arrived at this figure by looking at the per capita consumption expenditure in Indian rupees. The poor and vulnerable included the categories of ‘extremely poor’ with average daily expenditure <=8.9; ‘poor’ with average daily expenditure 9 to <=11.6; ‘marginally poor’ with average per capita expenditure 11.7 to <= 14.6 and ‘vulnerable’ with average per capita expenditure 14.7 to <=20.3.
[6] The incidence of poverty is estimated by the Planning Commission on the basis of the large sample surveys on household consumer expenditure conducted by the national Sample Survey Organisation (NSSO) on a quinquennial basis (Economic survey 2009).
[7] van Ginneken has defined social security as “benefits that society provides to individuals and households – through public and collective measures – to guarantee them a minimum standard of living and to protect them against low or declining standards arising out of a number of basic risks and needs”. (van Ginneken, 2003)
[8] TheLahore session of the Indian National Congress (also called the Congress party), on 31st December 1929, held under the presidency of Jawarhar Lal Nehru declared its objective of ‘complete independence’ from the British colonial rule. The meeting took a pledge to mark January 26 as “Independence Day”. The Lahore Session paved way to the Civil Disobedience movement and decided to observe January 26, 1930 as the Purna Swaraj (completeIndependence) Day.
[9] However, the Supreme Court of India read those economic and social rights into Justiciable Fundamental Rights. In Akhil Bhartiya Soshit Karmachari Sangh v. Union of India, AIR 1981 SC298 the Supreme Court held that the judiciary should use the Directive Principles as a code of interpretation to help them determine the substance of Fundamental Rights. The latter were effectively to be construed in the light of the former and wherever and whenever possible the former were to be read into the latter. In the light of this judgment, the decision of the Court in Francis Coralie v. Union Territory of Delhi, AIR 1981 SC 746 acquires particular significance. The Court held that the Fundamental Right to life which is the most precious human right and which forms the core of all other rights must therefore be interpreted in a broad and expansive spirit so as to invest it with significance and vitality which may endure for years to come. Hence, all of the core rights in Directive can legitimately be read into the Fundamental Right to life and therefore it is justiciable by the Supreme Court. In Olga Tellis v. Bombay Municipal Corporation, AIR 1986 SC 280, the Supreme Court held that the right to life includes right to livelihood because no person can live without the means of livelihood. However, the Supreme Court has held in Delhi Development Horticulture Employee’s Union v. Delhi Administration, AIR 1992 SC 789, that although broadly interpreted and as a necessary logical corollary, the right to life would include the right to livelihood and therefore right to work but this country has so far not found it feasible to incorporate the right to livelihood as a fundamental right in the Constitution. (Note 2 of Periodic Report, Government ofIndia, 2006).
[10] Quoted in Jean Dreze, Amartya Sen 2002
[11](Implementation of the International Covenant on Economic, Social and Cultural Rights—Periodic Reports Submitted by State Parties under articles 16 and 17 of the Covenant, p. 57 para 178
[12] Vasant Gupte, a senior trade unionist inIndia recalls, “The tripartite Labour Conference convened by the Central Government in December 15-18, 1947 arrived at a compromise which became famous as Industrial Truce Resolution. this resolution stressed the importance of securing a fair wage for labour and recommended the establishment of machinery for statutory resolution of disputes and determination fair wages, fair remuneration for capital and other things.” pp91. He adds that the labour laws enacted created an industrial climate that saw drastic reduction in the industrial disputes from 1951 onwards. Vivek Chibber observes that conference was intended to hammer out a class compromise between labour and capital, and then to point out the institutions which would cement this compromise for the long term. He further adds, the components of the Resolution (No.9) were geared, explicitly to hammer out a compromise with regard to labour’s distributive interests (profit sharing, fair wages), as well as its participatory interests (works committees and regional production committees).
[13] The organized sector is understood here includes primarily those establishments which are covered by the Factories Act, 1948, the Shops and Commercial Establishments Acts of State Governments, the Industrial Employment Standing Orders Act, 1946 etc.
[14] set up vide Order No. L and E-1(5)57, dated 3 August 1957
[15] Government ofIndia, Periodic report to UNESCR, 2006. It says that a number of models are in use to raise resources, namely, A number of models to raise resources for social security are in use viz., Central Budget Funded – Plan, Central Budget Funded – Non Plan, State Budget Funded – Non Plan, State Budget – Plan, State Government Sponsored Insurance (Employer and Employee), Commodity Cess Funded Welfare Funds, Insurance Schemes, Workers’ Funded, Self Financed Pension Schemes.
[16] Report of the Expert Group on Programmes for Alleviation of Poverty has observed, “The Sixth Plan (1980-85) has indicated that in 1977-78, on the basis of available information, 50.82 per cent of the rural population, 38.19 per cent of the urban population, and 48.13 per cent of the total population of the country subsisted below the “poverty line continuously over a long period”. The poverty line has been defined in the Sixth Plan as the mid-point of the monthly per capita expenditure class having a daily calorie intake of 2400 per person in rural areas and 2100 in urban areas. At 1979-80 prices, the mid-points are Rs.76 in rural areas and Rs.88 in urban areas.”
[17] The National Common Minimum Programme (NCMP) of the UPA government stated “The UPA Government is firmly committed to ensure the welfare and well-being of all workers , particularly those in the unorganised sector who constitute 93% of our workforce. Social security, health insurance and other schemes for such workers like weavers, handloom workers, fishermen and fisherwomen, toddy tappers, leather workers, plantation labour, beedi workers, etc. will be expanded.”
[18]‘Social Security Now’ is a network of over 500 organisations from all overIndia working towards the realisation of comprehensive social security and protections for unorganised workers through a central legislation. Can be accessed at http://www.socialsecuritynow.org/
[19] Table 2: Macroeconomic aggregates, Handbook of Statistics on Indian Economy, Reserve Bank ofIndia, 2008
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