2% salary cess to fund job insurance

Draft economic agenda stresses protection for unorganised workers, unemployed.

The draft common economic programme has proposed a 2 per cent cess on the salaries of organised sector employees to finance an ambitious employment insurance scheme for the unorganised sector.

The draft, which was discussed by the Congress at a high-level meeting today at 10 Janpath, has detailed an insurance safety net for the unemployed, which will make it easier for the government to adopt hire and fire policies with a clear conscience.

The insurance scheme is a crucial element of a social security net that Prime Minister-designate Manmohan Singh spoke about at his various interactions with the Press. For this purpose, the common economic programme refers to a 1995 labour and social welfare scheme, "Insurance Fund for Employees".

According to the draft, "Without this, hiring and firing will extract a huge political price.'' Any amendment to the Industrial Disputes Act will also require an insurance scheme. A committee to study the 1995 scheme has been suggested in the draft programme. All these suggest that the government is considering amending the Industrial Disputes Act, something the previous government had put off.

The draft document talks of a growth rate of around 7 per cent "" it also says that the 8 per cent growth rate mentioned in the Congress manifesto is unrealistic.

To push this growth rate, an increase in Plan expenditure on infrastructure like water, power and irrigation has been envisaged. All pending projects started by the previous National Democratic Alliance (NDA) government are to be completed with private partnership to bring down the costs incurred by the government.

Technical missions of the kind that were set up during the Rajiv Gandhi regime are also to be revived, with special reference to four sectors: water supply, sanitation, low-income housing and reforestation through social forestry. "These are employment-intensive, and here the input of the state governments should be minimal," states the document.

According to the draft economic agenda, the Centre will directly disburse funds through these technical missions for specific projects in different states. Normally these are funded through the state governments.

Referring to suicides by farmers in Andhra Pradesh and Karnataka, the draft talks in detail about crop insurance schemes.

"Reasons for crop failure like drought, hailstorms, pest attacks need to be taken into account," says the document. The patwari or lambardar in the area will be designated to vet the insurance claim.

Another radical suggestion is the payment of royalty for life to those who are ousted from their land to make way for infrastructure projects, instead of the money-for-land approach that the government follows now.

The draft also envisages a shift in focus for agriculture from "low-value perishable products to high-value cash crops and perishable foodstuff". Creation of value in the countryside is seen as one way to mitigate rural poverty.

The draft programme also reflects the fact that the Congress-led coalition is very mindful of the mandate given to it. There are references to the NDA's reform policies, which led to its defeat, because it did not carry the poor along and create enough social security for them.