Promising social security trends emerging for unorganised sector
Codification of social security laws and registration of unorganized sector workers mark a good beginning
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The initiatives taken by the government so far cover most aspects of social security through different schemes. This approach does however pose a few challenges as regards universal coverage. For one, all the schemes launched are voluntary in nature, and their success would depend on the financial capacity of the participants. Mandatory schemes could help avoid this problem by taking away the decision of saving from them. Examples are the compulsory PF scheme of EPFO and NPS pension schemes
Although there is currently no universal social security scheme in India, a step in that direction is that in the last few years many schemes touching upon individual components of social security, and aimed at the unorganized sector, have been launched. The prominent ones include Pradhan Mantri Shram Yogi Man Dhan scheme for providing pension, PM Jeevan Jyoti Bima Yojana for life cover, PM Suraksha Bima Yojana for accident insurance and PM Jan Arogya Yojana (Ayushman Bharat) for healthcare.
Collectively, these schemes can provide social security to the unorganized sector, because they provide assistance to individuals and households against most contingencies. A minimum amount of income security, by way of a monthly pension of Rs 3000 in old age, free health care for the poorest under Ayushman Bharat and life and accident insurance at very nominal rates are all available to workers in the unorganized sector now.
By all accounts, enrolment in these schemes has been growing rapidly, as the following numbers indicate.
PM Jeevan Jyoti Bima - cumulative enrolment 16.19 crore till April 2023
PM Suraksha Bima - cumulative enrolments 34.18 crore till April 2323
PM Jan Arogya - Ayushman cards issued 23.44 crore till date
PM Shram Yogi Man Dhan – 44.33 lakh joined the scheme.
Workers in the unorganized sector are also coming forward to register themselves in the eShram portal. By the last count, 29 crore workers had registered themselves. This marks a major step in identification of these workers and paves the way for rolling out schemes and programs for them in future. Currently, those who have registered with eShram, can enroll with the PM Shram Yogi Mandhan Scheme without having to apply separately for the latter. It is expected that the other schemes too will likewise be brought under the umbrella of eShram. This will greatly facilitate those workers wishing to join the various schemes of the government.
The initiatives taken by the government so far cover most aspects of social security through different schemes. This approach does however pose a few challenges as regards universal coverage. For one, all the schemes launched are voluntary in nature, and their success would depend on the financial capacity of the participants and their awareness of the schemes. This is important to remember, because typically, poor families feel hard pressed to save for a rainy day when immediate needs are not fully met, and end up becoming vulnerable to contingencies. Mandatory schemes could help avoid this problem by taking away the decision of saving from them. Examples of how effective this can be are found in the compulsory PF scheme of EPFO and NPS pension schemes of governments.
Further, individuals have to apply separately for each scheme, as a result of which there could be incomplete social security cover if some, and not all schemes, are joined. It is useful to bear in mind that all aspects of social security are important for people – insurance, pension, health care, unemployment, maternity, among others, and without a comprehensive cover, they will be exposed to risks. The risk would be aggravated by drop out of those who are unable to bear the contributions and charges for availing benefits of the schemes. It is therefore important to ensure that the entire social security package is availed by people, and this could be best done under a compulsory scheme, where it is not left to individuals to decide on whether or not to avail of these benefits.
In this regard, the recent codification of social security laws and registration of unorganized sector workers could lead to a movement in this direction through centralization of schemes and databases.
With the information that would be available, it would be possible to draw up comprehensive universal social security schemes for the people. Though it has not been spelt out so far, these trends appear promising for universal social security coverage and for achieving the social security for all goals. Developments in this space should be keenly watched in the days and months ahead.
(The author is former chairman of Pension Fund Regulatory and Development Authority (PFRDA))
