Security scheme mooted for unorganised sector

National commission for enterprises submits draft Bill.

A national minimum social security scheme for the unorganised labour, involving provident fund, unemployment benefits, pension, and health and life insurance, has been mooted by the National Commission for Enterprises in the Unorganised Sector, in its report presented to Prime Minister Manmohan Singh, here today.

The commission has also submitted a draft social security Bill seeking to make these measures legally mandatory for the government.

The implementation of the scheme would cost Rs 7,637 crore in the first year and gradually rise to Rs 25,401 crore in the fifth year when the coverage is extended to all the eligible 30-crore workers.

The commission, headed by noted economist Arjun Sengupta, had two full-time and two part-time members besides member secretary V K Malhotra, former chairman of the Food Corporation of India.

The commission has estimated that over 91 per cent of the country's total workforce falls in the informal workers' category and lacks adequate social security cover.

These include, broadly, employees of small unorganised sector enterprises, self-employed workers, agricultural labour and small and marginal farmers.

The proposed measures include health benefit to cover hospitalisation, sickness allowance and maternity benefit; life insurance to cover natural and accidental death; provident fund-cum-unemployment benefit for the above poverty line (APL) workers; and pension of Rs 200 per month for above 60-year old workers falling in the below poverty line (BPL) category.

All workers having a monthly income of below Rs 6,500 will be eligible for coverage under the proposed scheme that is envisaged to be implemented through worker facilitation centres to be set at the panchayat and civic bodies' level.

Besides, there will be national and state-level social security boards and a national social security fund to finance the scheme. All the financial transactions are recommended to be carried out through post offices.

Sengupta said the commission had already consulted the insurance companies and other related agencies which had said the proposals were practical and could be implemented.

The required funds would have to be raised by the government (75 per cent by the Centre and 25 per cent by the states) and it was up to them to decide how they raised the resources.

He said the required funds amounted to mere 0.2 per cent of the gross domestic product (GDP) in the first year and 0.48 per cent in the fifth year.

The states could add on and increase the benefits offered under the proposed minimum social security scheme. Several states were already providing some social security cover to the informal workers, he pointed out.