The Government should define and notify a minimum social security package for 430 million unorganised sector workers. The package should have a life and disability cover, financial protection against ill-health, maternity benefit and a pension plan.
These are some of the recommendations made by the Working Group of the National Advisory Council (NAC) on Unorganised Workers' Social Security Act 2008. The draft suggests creation of a single-window to implement the package, as also a cess to cover some of the costs.
FINANCIAL IMPLICATIONS
A special purpose vehicle or an independent authority at the national level, called the National Social Security Authority, should be set up for the purpose. The draft, which invited public comments till March 22, will now be considered by the NAC, headed by UPA Chairperson, Ms Sonia Gandhi.
For the maternity scheme, the draft says there is already an ongoing scheme of the Ministry of Women and Child Development, being piloted in 52 districts. If this scheme is fully rolled out over the 12th Plan, the likely allocation (with full coverage) is likely to be around Rs 12,000 crore. “This is already provided as one of the entitlements under the proposed National Food Security Bill 2011 that has been introduced in Parliament,” it says.
As regards financial protection against ill health, the funds will have to come from the Ministries of Health as well as Labour. Also, the Planning Commission is considering an increase in public spending on health from around 1.2 per cent of GDP to around 2 per cent of GDP. For the proposed life-cum-disability plus pension plan, additional financial allocations will need to be made by the Government. With a worker's annual contribution of Rs 500 and Rs 1,000, respectively, the total cost of this scheme after full coverage (both Centre and States) is likely to range between Rs 43,000-86,000 crore a year. Since the financial allocations for implementing this plan are likely to be around Rs 2,000-4,000 crore a year each for the Central and State Governments, the “Government may consider a cess to cover the increase in costs,” it suggests.
MAKE IT INCLUSIVE
The draft also suggests inclusion of all workers in the Act, barring those already registered with and covered by the provident fund and ESI scheme and the self-employed who pay income tax.
Unorganised sector workers, a large chunk of which is women, constitute 93 per cent of the workforce. The sector contributes to an estimated 60 per cent of GDP, 55 per cent of national savings and 47 per cent of all exports, says the draft.