NEW DELHI: The labour ministry has proposed a comprehensive social security system to provide retirement, health, oldage, disability, unemployment and maternity benefits to 50 crore workers in the country, a month after the government announced the National Health Protection Scheme announced in the Budget.
The plan is to implement the scheme in three phases over 10 years, after which the government hopes to make it universal. The scheme will be implemented in four tiers with the government wholly financing the cost for people below the poverty line. The first phase of the scheme will cost Rs 18,500 crore, a senior government official told ETon condition of anonymity.
The first phase will see all workers getting the bare minimum, which includes health security and retirement benefits. The second phase will see unemployment benefits being added to it while in the third phase, other welfare measures can be added.
ET had first reported in October last year that the government is firming up a universal social security cover for its burgeoning workforce as part of the labour code on social security.
According to the official, the scheme will be largely funded from the Building and Construction Worker Cess and funds allocated to other scattered schemes through the National Stabilisation Fund set up for the purpose
“Its implementation would be regulated and monitored by an overarching regulatory body called the National Social Security Council to be chaired by the prime minister with finance minister, health minister and chief ministers of all states along with workers and employers as its members,” the official said. The 50 crore beneficiaries will be classified into four tiers.
The first tier will comprise destitute and people below poverty line who cannot contribute for their security and hence the cost will be entirely borne by the government under tax-based schemes.
Workers in the unorganised sector who have some contributory power but are not self-sufficient may be covered under the subsidised schemes in the second tier.
The third tier of beneficiaries will include those who either by themselves or jointly with their employers can make adequate contribution to the schemes, so as to be self-sufficient while the fourth tier will comprise comparatively affluent people who can make their own provisions for meeting the contingencies or risks as they rise.
The labour ministry has sought comments from stakeholders on the second draft of the labour code on social security until April 30, after which the draft code will be finalised and tabled in Parliament after the Cabinet’s approval.
India's total workforce stands at around 500 million. A little over 10% of this is in the organised sector, where workers enjoy social security of some sort under EPFO and ESIC. But a major portion of the total workforce is still in the unorganised sector, where workers do not often get even the minimum wage and lack any kind of social security cover
Workers employed in the organised sector along with the employee contribute around 25% of the basic salary towards the provident fund and another 6% for insurance, taking the total contribution to more than 30%, which manages for the medical, provident fund and pension benefits for the employee.