On Friday, as Finance Minister Pranab Mukherjee rises to present his Budget speech, it will take an allocation of a little over one per cent of the GDP, or Rs 90,135 crore, to make trade unions (TUs) happy on one count.
A social security fund for unorganised workers was announced by Mukherjee in last year’s Budget speech and cleared by the Cabinet in July, with an initial allocation of Rs 1,000 crore. TUs have said this was inadequate and have demanded the government increase it to one per cent of GDP. The fund is to support social security schemes for the 435 million unorganised workers, who lack any, such as life and disability insurance, healthcare and pensions.
TU leaders would also want Mukherjee to reduce the threshold limit for the number in a workplace to be covered by the Employees Provident Fund (EPF) scheme from the present 20 to 10. At present, industrial establishments with less than 20 employees do not come under the PF Act. In 2008, the government brought the Unorganised Workers Act, to bring under the PF Act industrial establishments with less than 10 workers. However, establishments with 11-19 workers are covered in neither of the laws. If he makes an announcement on reducing limit, it will benefit five million workers.
| DEMANDS | |
| What the trade unions want | What it will cost (Rs cr) |
| Increasing allocation for national social security fund for unorganised workers | 89,121.78 * |
| Reducing threshold of employees in EPF scheme from 20 to 10 | 377.00 |
| Fixing minimum pension of Rs 1,000 | 637.00 |
| Regularisation of contract workers | No immediate budgetary support** |
| *Based on the advanced estimate of the GDP at market prices in 2011-12 ** Rs 11,000 crore annually to govt | |
The exchequer, though, would have to spend Rs 377 crore more in a year.
Whether he announces the government’s decision to contribute for fixing a minimum monthly pension of Rs 1,000 for workers would be closely followed by TUs. Since they and employers’ representatives on the Central Board of Trustees of the EPF Organisation have failed to reach a consensus on who would finance such a scheme,
TUs want the government to step in. The contribution is expected to cost Rs 637 crore and would benefit 1.5 million workers.
TUs also hope Mukherjee would address their long-pending demand to regularise contract workers. Though no immediate budgetary support would be required, the government’s decision would cost it Rs 11,000 crore and the private sector Rs 5,500 crore annually.
Around 32 per cent of the workforce in the public sector and 30 per cent in the private sector is estimated to be contract labour. There is no consensus on the issue in the government and the issue has been with a committee of secretaries for over a year.
