The Village Foundation Social Welfare Association

UNORGANISED SECTOR IN INDIA
Social Security and Welfare Funds
India is known for its huge geographical spread and magnitude of its populations. It has a huge working population of 406 million (based on NSSO Survey of 1990-2000). Almost 92% of this workforce is in the unorganised sector. There are numerous occupational groups pursuing economic activities from generation to generation without formal schooling and scattered all over the country with diffused employer-employee relationship.
The occupation wise distribution of employment indicates that 62% of the workers are engaged in agriculture, 11% in industry and 27% in the services sector. A characteristic feature of the employment situation in the country is that the percentage of workers employed on regular salaried employment (16%) is small. The bulk of the workforce is either self-employed (53%) or employed in casual wage employment(31%).
In India the term social security is generally used in its broadest sense, it may consist of all types of measures preventive, promotional and protective as the case may be. The measures may be statutory, public or private. The term encompasses social insurance, social assistance, social protection, social safety net and other steps involved.
There are number of models of providing social security to the workers in the unorganised sector. These may be classified as under:
• Centrally funded social assistance programmes.
• Social insurance scheme.
• Social assistance through welfare funds of Central and State Governments, and
• Public initiatives.
The centrally funded social assistance programmes include the employment oriented poverty alleviation programmes such as Swarnjayanti Gram Swarojgar Yojana, Jawahar Gram Samridhi Yojana, Employment Assurance Scheme. National Social Assistance Programme (NSAP) comprising old age pension, family benefit and maternity benefits to address the social security needs of the people below poverty line.
The social insurance schemes include several schemes launched by the Central and the State Governments for the benefit of weaker sections through the Life Insurance Corporation of India and General Insurance Corporation of India. There are schemes for the employees of shops and commercial establishments and other weaker sections. ‘Janshree Bima Yojana Yojana’ is a group insurance scheme and covers natural/accidental death, partial or total permanent disability due to accident and the people below poverty line and marginally above are eligible to join the Scheme. Another group insurance scheme for the agriculture landless labour, ‘Krishi Shramik Samajik Suraksha Yojana-2001’ launched in July, 2001 provides for pension and insurance besides providing money back. The contribution of the beneficiary is Re.1 per day while the Government contributes Rs. 2/- per day.
Several public institutions and agencies are also imparting various kinds of social security benefits to the selected groups of workers. Among these Self Employed Women’s Association (SEWA) has made significant achievement in promoting social security through the formation of cooperatives.
Welfare funds represent one of the models developed in India for providing social protection to workers in the unorganised sector. The Government of India has set up five welfare funds. Central funds are administered through the Ministry of Labour for the beedi and workers in certain other occupations for whom no direct employers-employee relationship exists and is implemented without any contribution from the Government. The scheme of welfare fund is outside the framework of specific employer and employee relationship in as much as the resources are raised by the Government on non-contributory basis and the delivery of welfare services is effected without linkage to individual worker’s contribution. These funds are constituted from the cess collected from the employers and manufacturers/producers of particular commodity/industry concerned. The following welfare funds under the various Acts of Parliament are being implemented for certain categories of unorganised sector workers:
S.No. Welfare fund Target beneficiary Commodity from which cess is collected Estimated coverage 1. The Beedi workers’ Welfare Fund Act,1976. Beedi workers Beedi (Indigenously hand rolled cigarettes) 4 million workers. 2. The Mica Mines Labour Welfare Fund Act,1946. Mica mine workers Mica ore.
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} 3. The Limestone and Dolomite Mines Labour Welfare Fund Act,1972 Limestone and Dolomite mine workers Limestone and Dolomite ore.
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}100,000
}workers
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} 4. The Iron Ore, Manganese Ore and Chrome Ore Mines Labour Welfare Fund Act,1976. Iron, Manganese and Chrome mine workers Iron, Manganese and Chrome Ore. }
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} 5. The Cine workers’ Welfare Fund Act,1981. Cine workers Feature films. 100,000 workers
These funds mainly provide medical care, assistance for education of children, housing, water supply, recreation facilities. There are 13 major hospitals and more than 300 static-cum-mobile dispensaries covering the target beneficiaries under these funds in respect of medical care to the workers and their families all over the country. There are various schemes for re-imbursement of expenses incurred on major surgeries like coronary by-pass, heart surgery, kidney transplant, cancer etc. Maternity benefits are also available to the women workers.
The group insurance schemes are also in operation for the workers without any premium contribution from the workers. The premium is paid from the fund. There are schemes for financial assistance to the workers for construction of their own houses. These schemes are very popular among the workers. It may be interesting to note that a novel and an innovative scheme for construction of 10000 houses by a co-operative society of the beedi women workers is being attempted in Solapur near Pune, Maharashtra. The amount of subsidy provided from the Beedi Welfare Fund is Rs. 20,000/- per house, while the women beedi worker has contributed a similar amount and the matching amount has been shared by the Government of Maharashtra(the provincial Government). The project was started three years ago and by now around 5000 houses are complete. There is an effort of the Government to encourage beedi workers to replicate such experiments in other parts of the country.
Similarly, a large portion of the fund is diverted as financial assistance for the education of the children of the workers from primary school to graduation and post-graduation studies. The welfare fund model of providing social security has been well accepted and popular in the country.
The Government has also enacted a Central legislation for the building and other construction workers towards creation of welfare funds at the level of States. There are around 20 million construction workers in the country. A small cess is collected on the basis of the cost of a construction project which makes the corpus of the welfare fund for the construction workers. All facilities as enumerated above are provided to this section of the unorganised sector workers. Presently three States in the country namely, Kerala, Tamilnadu and Delhi have started implementing schemes under this Act. However, other States are in the process of adopting.
Moreover, the welfare fund model have successfully been implemented by various States for various categories of workers. The State of Tamilnadu are running 11 Welfare Boards for workers like construction workers, truck drivers, footwear workers, handloom and silk weaving workers. Similarly, State of Kerala are also running several welfare funds for agricultural workers, cashew workers, coir workers, fisherman, toddy-tappers etc. The model is so popular that some of the other States like Andhra Pradesh and Karnataka are in the process of bringing out their own legislation for creation of welfare funds in the unorganised sector workers for providing them social security. In fact Government of Madhya Pradesh has even enacted a legislation for the unorganised workers.
However, the coverage under all the above programmes is little more than 10 million out of an estimated 370 million workers in the unorganised sector. A lot more has to be done in the matter of providing social security and social protection to these workers. To assess the working and living conditions of such a large
workforce, the Government appointed various Commissions and the Study Groups from time to time. All these Commission/Studies have projected the plight of the workers in the unorganised sector and called for substantial measures to improve their working and living conditions. The Second National Labour Commission on Labour (NCL), which was appointed in 1999, was, inter-alia, mandated to suggest on umbrella legislation for the workers in the unorganised sector. The Commission, in its report, which was submitted to the Government in July 2002, has recommended umbrella legislation for ensuring a minimum level of protection to such workers. The matter assumed the utmost importance and was actively discussed during this period which the social partners throughout the length and breadth of the country.
As an outcome, the Government has recently approved the ‘Unorganised Sector Workers’ Social Security Scheme’ which has been launched on pilot basis in 50 districts. The Hon’ble Prime Minister Shri Atal Bihari Vajpayee have launched the Scheme in Lucknow (UP) on 22.2.2004. The Scheme envisages to provide three basic necessities to the workers in the unorganised sector (i) old-age pension, (ii) personal accidental insurance and (iii) medical insurance. The scheme is available for the workers drawing pay/wages/income not more than Rs. 6500/- p.m. The details of the benefits are as under:
(i) Pension Scheme: A minimum pension @ Rs.500/- per month at the age of 60 years or permanent/total disablement and family pension in case of the death of the workers with a provision for enhanced or reduced pension based on the contribution;
(ii) Personal Accidental Insurance: The accidental insurance cover of Rs. one lakh; and
(iii) Medical Insurance: Coverage under the Universal Health Insurance Scheme (UHIS) for a family of five including member. The Scheme provides for reimbursement of hospitalisation expenses upto Rs. 30,000/- in a year and in case of member is hospitalised due to accident/illness, a compensation of Rs. 50/- per day upto a maximum of 15 days after initial period of three days and also coverage of death of the worker due to accident (Rs. 25,000/-).
To avail benefits under all these scheme, there is a single contribution @ Rs. 50/- p.m. from the workers joining the scheme in the age group of 18-35 years and Rs. 100/- p.m. from the workers in the age group of 36-50 years. The contribution from the employers wherever identifiable in both the categories is @ Rs. 100/- p.m. Government’s contribution is @ 1.16% of the monthly wages of the workers (Presently @ Rs. 250/- per annum per worker) based on the national minimum floor level wage as notified by the central Government from time to time.
The Scheme is being implemented through the Employees Provident Fund Organisation (EPFO) having around 260 offices in the country and which will provide single window service to the workers for all the three components of the Scheme. As far as practical and feasible the infrastructure of the Employees State Insurance Corporation (ESIC) will be sued to provide benefits under UHIS. The Workers Facilitation Centres are being set up to assist the workers and liaison with other agencies like State labour
machinery and also the Panchayati Raj Institutions, Self-Help Groups and NGOs, etc. for smooth implementation of the Scheme.
I am of the firm opinion, that these measures will go a long way in improving the living and working conditions of the poor workers in the unorganised sector and inculcate the feeling of self-esteem, dignity and security.
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